Before leaving One Eyed Jack's, we see Audrey Horne in a room, getting ready for her undercover job as a "hostess". She is in way over her head, and shown only briefly before the action turns to Shelly Johnson, who is living her own personal hell.
As far as Shelly knows, she killed her husband (Leo) when she shot him a few episodes back, and she is contemplating going on the run. The first step would be to change her appearance, and so she decides to bleach her hair. As she works up an eye-stinging lather in the sink, Leo comes out of nowhere and subdues her, vowing to make her pay for what she did.
Before we can catch our breath, the next scene unfolds with Andy and Truman waiting for Jacques Renault to show up. Seconds later, as he's being handcuffed, Jacques breaks free and grabs a nearby deputy's gun, aiming for Truman. But he is shot in the arm by none other than deputy Andy himself, fresh out of the firing range and standing cool as can be with his gun still raised up: the hero of the day. This moment is still one of my favorites in the series.
Afterwards, the trio of Donna, James, and Maddy are shown listening to the tape they stole from Dr. Jacoby. It's on this tape that Laura reveals that her mystery man drives a red corvette (which is Leo's car), and James hears that she thought he was sweet but dumb. He handles the situation wonderfully, seeing it as a chance to find closure regarding Laura, rather than letting her barbed remark cut him too deeply. In the midst of everything else that has happened in the episode so far, this emotionally charged scene seems like a break in comparison, and sure enough, without delay we are taken right back into the thick of it.
The Packard Mill is being prepped for arson by Leo Johnson, and Shelly is tied up in the midst of it, waiting to be burned alive. She has roughly an hour to think about how she wronged him, and Leo assures her that Bobby Briggs will be dead within that hour.
And still the plot ascends to previously unknown heights as the camera shows Nadine Hurley setting herself up for suicide by pills. She was fractured from her introduction, always flirting with madness, but at this point she is truly broken. As unlikable as she has been throughout the series, I couldn't help myself but to hope for some sort of Deus Ex Machina to intervene on her determination to kill herself.
But the action moves on without a whisper of hope. Death, which was mostly flirted with in the series so far, has descended on the town of Twin Peaks as an avenging angel. No one is safe, and all bets are off by this point.