The rest of our major players are slowly getting wind of the latest crime and its fallout. Malvo has found a small cabin in the woods to make his home base during his hunt for Lester (the stuffed wolf head over the fireplace is a nice touch). He’s standing over the stove making something to eat, listening to the police scanner, when he perks up at the mention of "FBI boys" now being involved. When he hears they’re being paged to the station, he grabs his weapons and heads out.
Meanwhile, FBI boys Budge and Pepper are falling asleep in the lobby of the police station, where you get the sense it’s only a matter of time before Malvo is going to take them out—now, while they’re dozing off? Molly and Bill are ready to hand Lester over to the agents for interrogation when Lou walks in, telling his daughter that Lester was in the diner when the murder happened, but that’s not why he’s here. He mentions the "strange fella," aka Malvo, who stopped by the diner asking about Lester earlier in the day. She takes out the elevator picture of Malvo taken from the office in St. Paul. Lou can’t confirm that’s the same guy, unless he changed his whole look. But maybe…
Molly asks him to let Gus know it's going to be a late night. Lou says screw that; he’s grabbing his gun and is going to sit on the front porch to make sure his granddaughter is safe. As Lou gets into his pickup and pulls away, Malvo walks up to a car, breaks in, and grabs a book from the glove box. He walks away from the station, so everyone appears safe…for now.
Alone in the interrogation room, Lester once again flashes back to the elevator in Vegas and Malvo asking him, "Is this what you want?" The authorities walk in.
"Bill, tell me she's not still lying there and everyone's stepping over her," Lester says, trying to appeal to the sap who unwittingly helped him get away with murder the first time. Bill doesn't respond. Molly sits down and tells Lester the two men who have also entered are with the FBI. This throws Lester...the FBI? He assumes this is about Vegas.
"Is this? I didn't see nothing. All I did was get on the elevator…" Lester tries.
Pepper tells him they're not there to talk about Vegas. Budge contradicts him with "we are and we aren't" in the Key and Peele-esque repartee that they've brought to all of their Fargo scenes. Budge ignores that remark and places images of Malvo on the table. Molly tries to read his face. He shakes his head. Once again, Lester tries to appeal to Bill, who looks helpless. "Answer the question," Bill tells him. And in that moment, Lester realizes he's lost his ally.
"Um, yeah. I'm now asking for a lawyer, for the record," Lester says. Molly opens a folder and throws another photo in front of Lester; it's from Vegas. "He's changed his look," Molly says in reference to Malvo. Lester gets defensive. "I'm done answering you," he says. "You've obviously made up your mind that I'm some kind of…and I'm not…MY WIFE IS DEAD!" he shouts. "And there are arrangements to see to. So you can either lock me up or let me go," he seethes. His guilt is palpable.
Molly has one more go at Lester: "He's not gonna stop. You know that, right?" she asks, protecting Lester from Malvo as much as she's hoping to get a confession out of him. "A man like that may be not even a man." Lester looks at everyone in the room; this is beyond his experience. How does he get out of this?
In the morning, Molly is briefing the Bemidji squad on Malvo; they’re going to use Lester as bait. The entire force will be searching for him, along with a team the FBI is sending in. Gus—alerted to the situation after stumbling upon his gun-toting father-in-law on his porch and now on his way to meet his wife—calls Molly and begs her not to lead this search. She protests—it's her job!—but Gus has a bad feeling. "Sometimes you get forces you can't control," he says. "Bad luck, you know?" He hopes she’ll let her precinct full of cops do the dirty work. "Bottom line," he says, "I can't make her go to another funeral, you know?"
Molly softens at the idea of Greta losing another mom and agrees to run things from the station. But why does Gus think the station will be a safe place when they're up against a man like Malvo? Gus hangs up and slams on the breaks—in the middle of the road stands a wolf, which slowly lumbers away. And as he thinks about that close call, he notices the red BMW parked in front of a small cabin, the suspicious car he thought Malvo might have been driving when he spied it on his mail route. Gus drives a little farther, pulls over, and gets out. So he’s okay putting himself in danger? Gus cuts through the woods and circles to the side of the cabin. He crouches down and watches as Malvo gets into the BMW and drives away. With Malvo gone, he enters the cabin.
Back at the station, Molly walks into Bill's office to confirm the plan: They're going to take Lester home, surround the house, and try to draw Malvo out. Bill looks discouraged; she asks if he's all right, and he says he's quitting once this manhunt is over because he doesn't have the stomach for it—which is both literally and metaphorically correct. The once-optimistic Bill now looks over his shoulder all the time, he admits. "I never wanted to be the type to think big things about the nature of things," he says, which we all figured out pretty quickly. "All I ever wanted was a stack of pancakes and a V8." It's the most self-reflective thing he's said all season; it’s just a shame he didn't come to that realization a year ago when the former chief was murdered.
Now Vern's rightful replacement—Molly—will get a shot at the job, as Bill says he’s recommending that she take over as chief. "You're the real deal," he says. "You got the instincts and the disposition. I didn’t see it before," he apologizes. "Vern saw it; I know that." He hopes she'll take the gig after she has the baby. Molly says she'll think about it; she didn't see this coming, but more importantly she is focused on Malvo and setting the trap.
But Malvo is setting a trap of his own. He's parked right outside of the precinct, where he makes a call inside. He says he is FBI and he's looking for his agents; he manages to get their names from Cindy in reception: Pepper and Budge. He writes their names in his notebook, which he stole from the agents' car, and hangs up to make another call. This one is to the FBI.
Using the information in the stolen notebook, Malvo gets in touch with Operations. He impersonates Budge and says they’ve hit a dead end and there’s no need to send backup because his partner jumped the gun. Operations tells him to get his s--t straight and cancels the cavalry. Can Bemidji PD handle Malvo on their own?
But that’s just the beginning of the wanted hit man's nefarious plan. He pulls up to a car dealer eyeing a sedan that looks like "an undercover vehicle, like an FBI car," he says to the salesman, who happens to be the guy Lester tried to sell life insurance to way back in episode 1. Malvo asks to take a test drive, and the way-too-nice guy agrees, even though they’re not technically open yet. He throws Malvo the keys, calls shotgun, and they drive off with a lingering shot of the plates: DLR for dealer (a callback to the ones on the getaway car in the movie Fargo).
Malvo seems one step ahead of the cops, whom—as he seems to have anticipated—are letting Lester go in the escort of the FBI.
"I'm not sure what you had against me since day one," Lester tells Molly as he’s heading out. "I'm not the person you think I am, this kind of monster." The look on Molly's face is all "Okay, that's how this is going to do down?" She drops her pen on the table and starts into a parable.
"There's a fella once, running for a train," she says. "And he's carrying a pair of gloves, this man. He drops a glove on the platform but he doesn't notice. And then later on inside the train he's sitting by the window and he realizes that he's just this one glove left. But the train's already started pulling out of the station, right? So what does he do? He opens the window and he drops the other glove onto the platform. And that way, whoever finds the first glove can just have the pair."
"So what are you telling me?" Lester asks. He's not sure how to take her. Does he think he’s getting away free again? "Goodbye, Mr. Nygaard," Molly says, and goes back to her paperwork. What is Molly trying to say here? Perhaps it's that sometimes you need to acknowledge when you’ve been defeated and make the best of the situation.
The agents escort Lester out of the precinct, and sure enough, just as a reminder, their car looks just like the one Malvo is test driving/surely stealing, which they then drive past an identical vehicle that pulls out behind them.
"I didn't do this, you know. Any of it," Lester tries to protest. "That deputy, she's got a thing for me." Budge looks at him in the rearview, isn’t buying it. No one answers him… though later, Budge asks Lester his fox, cabbage, and rabbit riddle. Lester tries to solve it: Take the rabbit, then take the fox, drop him off, put the rabbit back in the boat, then leave the rabbit behind, row the cabbage across, then go back for the rabbit. Correct!
They pull into Lester's driveway. Incognito Malvo pulls up at a safe distance and waits, then drives off. "We feel we need to say again that your life may be in danger," Pepper tells Lester. "Like a lot of danger," says Budge. They inform him they're going to sit tight for a while. Is this going to be a repeat of the Fargo incident? Them sitting outside, clueless, as a murder takes place inside?
Lester goes directly to the basement, to the box of hunting gear. He has a plan.