Oliver inspects the black arrow and realizes it's a custom job. Dig wonders whether the copycat is trying to frame Arrow or get in touch with him. Oliver says that either way, he needs to find the guy. So he goes to Felicity for help. He tells her he wants to get the arrow for his buddy's birthday but he has no idea where to purchase it. Felicity tells him the arrow is registered to a company called Sagittarius, which is Latin for The Archer. Oliver wants to know where and when the arrow was purchased. She tells him the arrow was part of a bundle shipment and provides him with an address. Oliver is undoubtedly pleased. "You are remarkable," he tells her. "Thank you for remarking it." These two are a rom-com in the making.
At Laurel's place, Det. Lance listens to news reports about the recent murders. The media is pinning it on Arrow but Laurel doesn't believe he's responsible. Tommy drops in to see Laurel, but she's not excited to have him there. The holidays have been tough for her since her sister died, and she wants to spend the time with her dad. Tommy tells her he thinks something else is holding her back. Before he leaves, he hands her a present and invites her to be his plus one to the Queen holiday party. While Laurel's dad tells her the Queens and the Merlyns are bad people, she opens Tommy's present. It's a framed picture of her with her sister and her dad.
Meanwhile, Arrow traces his copycat to an abandoned warehouse. Once he gets there, he realizes — almost too late — that it's rigged with an explosive. Luckily, he manages to escape without getting injured. Good thing too because there's a Christmas party to attend!
After snapping a picture with his family at the party, Oliver greets Tommy and Laurel, who arrived arm in arm. The three acknowledge the awkwardness of their situation but manage to get past it rather quickly. In fact, when Laurel takes Oliver aside to tell him she wants to move forward with Tommy, he gives her his blessing.
Outside of the party, Moira accuses Walter of lying to her. "You said you were through investigating Robert's death," she says. To which Walter responds: "Do you take me for a man who wouldn't avenge his bestfriend's murder?" Then he turns the tables on Moira. He wats to know why she lied to him, embezzled money from the company and salvaged the Queen ship. Moira reveals that she did it all for leverage. Walter asks Moira who she's fighting against, and she promises to tell him everything...but after the party.
Oliver goes to check on Thea and finds her in bed with her boyfriend. He's upset because he threw this party for her, but she says she's not interested. She claims she's been trying to forget the way things used to be, and the party just brings up unwanted memories. Who is this year's most annoying teen? Thea or Dana on Homeland? (Okay fine, it's definitely Dana, but Thea is a firm second).
Dig pulls Oliver aside to show him the news. Turns out, the copycat has taken hostages and is threatening to kill one every hour unless Arrow turns himself in. Dig says the police will handle it, but Oliver feels responsible.
Cue flashback to the island: The green-hooded man still believes Edward can get Oliver off the island, but Edward has other plans. Suddenly, the group is ambushed by a group of men. Edward says he planned his capture so he could trap Oliver's mentor. The mentor tells Oliver to run. Later, Oliver watches as Edward's men kill his mentor.
In Starling City, Arrow arrives at the warehouse before the first hour is up. He manages to get the hostages to safety, before confronting the copycat. The copycat tells him he wants to find out who the better archer is. The two go head-to-head, and eventually, the copycat gets the upperhand. He shoots Arrow in the back and kicks him down repeatedly. The copycat tells Arrow that the man who authored the list wants him dead. Just as the copycat is about to remove Arrow's hood, Arrow stabs him and makes an escape. He stumbles outside the warehouse and calls Dig for help.
Later, Oliver wakes up in a hospital, where his family comes to visit him (Dig told them Oliver got into a motorcycle accident).
Meanwhile, the copycat archer finally reveals his identity: It's none other than Merlyn Sr. (Since we always knew he was a bad guy, I wasn't completely surprised by this revelation).
Back at his office, Walter is on the phone with Felicity, who apparently called to ask if Oliver was doing okay. He hangs up and gets in the elevator, where a man injects him in the neck with some sort of chemical.
Moira has another secret meeting with Merlyn Sr. He assures her that Walter will not be harmed. (Yes, that's right. It turns out Moira was behind Walter's drugging). Merlyn Sr. says he gave her a chance to get Walter under control and she couldn't do it. "That's what you said to justify Robert's murder," she says. He points out that she's being quite judgmental for a woman who had her son kidnapped and tortured (there's a revelation for you). She says she only did that to prove that Oliver didn't know anything about the organization's plans. Merlyn Sr. tells her that in six months the organization's vision of what Starling City should be will be complete. Moira says that in order to achieve that vision thousands of innocent people will have to die, but Merlyn Sr. doesn't seem to care. He tells Moira that she'll have Walter back once the mission is complete.
At the hospital, Oliver tells Dig that when he confronts someone on the list, he tells him they failed the city, but tonight, he was the one who failed. Dig tells Oliver that he'll eventually get the upper-hand on the copycat, but Oliver says they have a bigger problem. He says he always assumed his father compiled the list, but after the confrontation with the "other archer," he has realized that someone else may have authored the list...someone who is more of a danger than the archer. Oliver promises to take him down.
So there you have it: Walter is gone (temporarily at least), Merlyn Sr. is the "other archer," the organization plans to kill thousands of people, and Oliver has a new mission. Quite a setup for the second half of the season.
All that considered, I have to say I enjoyed the pacing of this episode, though I didn't quite experience an "Oh no they didn't moment." Did you?
Oliver: "I think the vigilante needs a better code name than the hood or the hood guy."
Meryln: "I agree. How about Green Arrow?"
Felicity: "Don't you knock?"
Oliver: "Felicity, this is the IT department. Not the ladies room."