Young Stanfield dealers Justin and Jamal leave a convenience store and hear gunfire nearby. They rush away from the store and come across the body of LaTroy, a Stanfield lieutenant. Their colleagues Snoop and Tote pull up in a truck and Snoop orders them to get in for their own safety. Meanwhile Marlo Stanfield remains safely protected by numerous bodyguards. Marlo and Chris Partlow set up a night time ambush for Devonne, the woman who acted as bait in a failed trap for Marlo. When she emerges from her home Marlo shoots her twice and when she has fallen fires a third bullet through her mouth. Partlow assures him that the murder was necessary.
Detective Vernon Holley attends a crime scene in the Western District, another drug murder, he suggests that the Barksdales are the most likely suspects with the victim being one of Stanfield's people and the ongoing drug war. Fruit is nearby to see the body of his colleague. At a safehouse Slim Charles reports in to Avon Barksdale, signaling that two of Stanfield's people have been killed. The drug murder prompts another police crackdown on dealers city wide affecting dealers from Proposition Joe's co-op including Fat-Face Rick and Philboy. They complain to Proposition Joe about the ongoing war affecting their business.
Stringer Bell meets with Shamrock at the funeral home. He is annoyed that his bodyguards have been replaced by Slim Charles. He asks Shamrock about their drug business and learns that they are running out of product. Stringer drives to a meeting with Proposition Joe and the disgruntled co-op members that takes place in the back room of a pawn shop. Stringer orders his bodyguard to wait outside. Proposition Joe tells Stringer that despite Stringer's contribution, the co-op has voted to shut the Barksdales out if the war continues against Marlo. They have approached Vinson and found that Marlo may be amenable to a truce if he can keep his territory. Proposition Joe tells Stringer that he is faced with a crisis of leadership.
Avon continues to plan his warfare with Slim Charles for their base of operations. Stringer interrupts to deliver Proposition Joe's news about a potential truce. When Avon seems reluctant Stringer admits that the co-op plans to shut them out. Stringer accuses Avon of getting high on the power of leading the war. Stringer asks Avon to consider if they are in "the game" for their reputation or for the power it gives them. Avon tells Stringer that Marlo has murdered Devonne and restates his intention to continue the war.
Stringer returns to the print shop and slowly comes to a difficult decision. Eventually he phones the Western district police. Later he finds that property development grants have been awarded but not to his company. He gives Shamrock some documents to take to their lawyer, Maurice Levy.
Major Howard "Bunny" Colvin meets with Sergeant Ellis Carver and thanks him for his loyalty. He tells Carver that he thinks he is a good man and a good supervisor but he is not performing as an investigator. He berates Carver for his lack of confidential informants. Colvin tells Carver that the drug war is not police work - it is about having two sides battling against one another and urges him to learn his post and gather information about the people in his district so that he can protect them properly. Lieutenant Mello interrupts to tell Colvin that reporters have learned of his free zones. Meanwhile, Detective Thomas "Herc" Hauk and Officer Lloyd "Truck" Garrick are taking the reporter on a tour of the free zones and revealing every detail of Colvin's plan. Colvin and Mello arrive at Hamsterdam to talk to the reporter. Colvin spins the reporter a story about the free zones being part of an enforcement strategy and the reporter agrees to hold the story for a week. Colvin discusses his options with Mello and his community relations sergeant. He decides to admit his involvement and face the consequences.
At the next comstat meeting Colvin gives a presentation showing his cleaned up streets where drug trafficking was once uncontrollable. Major Reed is slow to understand how Colvin achieved this but Deputy Commissioner Rawls immediately realizes that Colvin has essentially legalized the drug trade in specific areas claiming that Colvin has gone insane. Commissioner Burrell, enraged, immediately ends the COMSTAT meeting calling Colvin into his office with Rawls and Major Reed. In the commissioner's office, Burrell begins fearing for his job stating that he is "dead" while Major Reed claims that the entire department is going down because of Colvin. Colvin tells Burrell that he acted alone and that he is willing to lie about who sanctioned his ideas if any of his subordinates are punished for his actions. Burrell is incredulous that Colvin is willing to threaten him. Colvin reminds Burrell about the impact on crime in his district and Burrell tells him that it's not enough to protect them. Burrell tells Colvin he is to take his vacation time so as to avoid drawing attention to the scandal." On the way out the door, Colvin tells Burrell that a Baltimore Sun reporter is aware of Hamsterdam and is delaying a story from the press.
Tommy Carcetti and Theresa D'Agostino chair a campaign strategy meeting with Carcetti's close friends. The major issue discussed is race, Carcetti's team agree that they need African Americans in their campaign team and endorsements from black community leaders. D'Agostino outlines the importance of keeping Anthony Gray in the race in order to split the black vote. Carcetti is reluctant to begin making fundraising calls but D'Agostino tells him they desperately need the funds.
Carcetti discusses his worries about betraying Gray while in bed with his wife, who is reading a Dennis Lehane novel. She suggests that he tell Gray that he also plans to run but Carcetti worries that this may drive Gray out of the race and he knows that his campaign is dependent on Gray remaining a candidate.
Burrell meets with Mayor Clarence Royce and his Chief of Staff Coleman Parker to tell them about Colvin's actions. Parker suggests that Burrell will be fired and refuses to take his lack of knowledge about the situation as an excuse. Burrell tells Royce about the crime reduction and gives him letters from supporters in Colvin's district specifically those of citizens and voters who Royce is most concerned with for the upcoming election. Royce is impressed with the drop in crime and refuses Burrell's suggestion to break the story and claim it was planned as a trap for drug dealers. Royce dismisses Burrell and contemplates how to use this information.
Major case unit
Detective Jimmy McNulty complains to his colleague Lester Freamon that they are still not up on any wiretaps and are probably missing drug conspiracy phone calls. Lieutenant Cedric Daniels and Assistant State's Attorney Rhonda Pearlman meet with Judge Phelan to discuss their difficulties with drug dealers discarding phones. Phelan continues to flirt with Pearlman throughout the meeting. He asks her for other options and she says that her boss, State's Attorney Demper, is too focused on re-election and the feds are unable to help. Phelan offers to sign wiretap affidavits at any time as they uncover phone numbers. As they leave Daniels comments on Phelan's attraction.
Daniels and Pearlman discuss the meeting with McNulty. He wants to rush the paperwork but Daniels cautions him. McNulty is disappointed that Phelan is the assigned judge, still angry at his behavior on the first Barksdale investigation. Daniels points out that McNulty believes that anyone who gets in his way is worthless and McNulty concedes the point.
Freamon matches drug dealer Bodie Broadus' voice to a prior recording when he makes a phone call to his grandmother. This information is used as probable cause for a wiretap. With the wire up and running on Bodie the unit soon has him talking in code about drugs to less disciplined colleagues who use names on the phone. Bodie is heard ordering a resupply for a dealer known as Tweety Bird. Officer Caroline Massey tells McNulty that the code remains similar to their other investigations apart from one word - Hamsterdam. She guesses that it may have something to do with the stash house. McNulty departs to meet up with Kima Greggs and observe Bodie's meeting with Tweety Bird. Daniels asks Pearlman to leave the room and tells his detectives the latest news about their suspended co-worker Roland "Prez" Pryzbylewski - internal investigations have become involved. Daniels has to ask Massey and Freamon if they ever faced racism from Prez. Massey and Freamon both claim no. When Daniels leaves, Massey wonders if Prez would have shot Waggoner if he were White, while Freamon defends Prez claiming the suspect they were looking for was a number one male (BPD police code for African American male).
McNulty is relentless as he and Greggs wait for the meeting to happen. He tells Greggs about his failed relationship with D'Agostino. His main complaint is that D'Agostino seemed to question his intelligence. The next day a more cheerful McNulty reports successfully tailing Tweety Bird to a possible stash house. The rest of the unit are despondent because the Barksdales have ditched their phones. Daniels is appalled at the cost of getting the wiretaps for so little return. Sydnor suggests that they should continue to follow Bernard and Squeak to try to get wiretaps on the next batch of phones. Greggs worries that there is little point in expending so much effort for phones that are in use for such a short time. Daniels asks for a way to get ahead of the curve and Pearlman suggests they could try to pre-wiretap the phones. Freamon and McNulty both have an idea that might solve the problems - supplying the phones directly to Bernard, the Barksdale crew member responsible for purchasing them. Leander Sydnor watches the unit's camera on the printshop and notices Stringer worriedly pacing and smoking. Later the detail log shows Stringer making a call to the Western district.
McNulty and Greggs visit Bubbles to ask him about Bernard and his girlfriend Squeak. Bubbles recognizes Squeak and agrees to talk to her. At the detail office Freamon discusses using Bubbles to set up an undercover meeting with Squeak. Daniels and Pearlman meet with Phelan again with their new plan and despite its being legally shaky he agrees to go ahead with it. McNulty gets a call from Colvin and visits him at the Western offices. Colvin tells McNulty about a tip about Avon's whereabouts but does not reveal his source. The next day Greggs and McNulty meet with Bubbles and tell him about their plan to sell phones to Squeak. As they talk McNulty thinks he spots Beadie Russell driving past. He chases the car, but the driver was not Russell.
Later, Bubbles stages a reconnection with Squeak and shows her that he is selling cell phones. She arranges a meeting between Bernard and Freamon - who is posing as Bubbles' supplier. Freamon pretends to be a conman named Calvin and Bernard checks his story by having him prove he can read numbers. Freamon takes Bernard and Squeak to a staged cell phone shop. He explains that he is taking discarded phones and paying to have them reactivated using bogus accounts and then selling them as new. Massey poses as Freamon's niece and assistant. Bernard is taken in, but insists on doctored receipts as part of the deal.
Brother Mouzone returns to Baltimore with his aide Lamar. First of all they come across detective Holley's crime scene and Lamar admits he has no idea where they are. Later they find their way to the site of the demolished towers they were once paid to defend. To explain what happened to the towers Brother Mouzone tells Lamar that reform has come to Baltimore. Brother Mouzone meets with Vinson and gives him a description of Omar Little. Vinson tells him that Omar is an independent operator and a homosexual.
Brother Mouzone sends Lamar, a "visceral" homophobe, into various gay bars looking for Omar claiming he is the "perfect bait" for Omar to notice. On the search, Omar is nowhere to be found, but Deputy Commissioner Rawls is visible in the background of one of the bars. Lamar is disgusted by the search having little success finding Omar with his anger drawing the attention of several bar patrons. Lamar finally gets a lead by angering a bartender referring to him as a "cocksucker" and catching the attention of Omar's boyfriend Dante in the process. Dante approaches Lamar on the street outside of a club with his weapon drawn to ask what he wants and Brother Mouzone subdues and captures him.
Omar meets with Butchie to discuss the Barksdale organization's accidental near-shooting of his grandmother, Josephine. Butchie is disgusted that the Sunday truce was broken. Butchie tells Omar about the Barksdales funeral home base. Omar is outraged that Butchie has kept this information from him until now and Butchie tells him that he was trying to protect him. Omar begins to stake out the funeral home and sees Stringer leaving.
The Deacon visits Dennis "Cutty" Wise at his gym. He is repairing the equipment as best he can. The deacon discusses getting children to use the gym. Cutty visits Hamsterdam and finds Carver trying to organize a basketball game. Cutty approaches him and discusses the boxing initiative. Carver refers him to his time out corner filled with children who can't play without fighting. Cutty breaks up a fight that has just broken out and begins to teach some moves. Justin and Spider are the two children involved in the fight.
Justin and his friends visit the gym and instantly criticize the state of the equipment and start an impromptu football game. Cutty is overwhelmed by the children's ebullience. Cutty cannot control his temper and when Justin insults his masculinity he challenges Justin. Justin reminds him of the consequences of striking a juvenile and then leaves the gym. Cutty discusses his difficulty with the trainer at another, more established gym. The trainer encourages Cutty to remain patient and show the children that he has faith in them by not letting them fail - no matter how hard they try to.
Cutty returns to Hamsterdam and talks to Carver. He tracks down Justin and apologizes for his behavior at the first meeting. Later, Justin returns to the gym and finds Cutty training a young enthusiast.