The second episode of Welcome to Derry opens with Lilly awakening from a nightmare, reliving her terrifying encounter with the CGI baby in the theater. But this was no mere dream; the massacre was very real, with Hank, the owner of the theater and Ronnie's father, emerging as the prime suspect. Police sit outside his place, speculating on what transpired that fateful night, but Hank's alibi - he was sound asleep in bed - is not enough to convince them.
Hank's mother, determined to push her son in the right direction, insists that he send Ronnie back to school. She believes it's the best way for her granddaughter to make a name for herself and escape Derry.
Meanwhile, Major Leroy Henlon, with his son Will and wife Charlotte, settle into their new house after hearing about the recent disappearances in the newspaper. They receive curious glances from the neighbors, but Will's attention is immediately drawn to the new telescope Charlotte has procured for him.
Leroy's mind remains preoccupied with the masked goons who attacked him at the base, and it's not hard to guess that it could have been Masters, the man who refused to salute him in the previous episode. Colonel Fuller promises swift justice after arresting him, but Leroy is not entirely convinced that this is the whole story.
At school, Ronnie is the center of attention among the popular girls, who whisper about her and the murders. Marge, Lilly's "friend" who desperately wants to be part of their group, stands on the fringes. She cares about how Lilly is doing, but more from a superficial popularity standpoint. Marge calls Lilly out in class for talking to Ronnie and how it looks "bad," but Lilly dismisses her concern with a wave of her hand.
Will arrives in class and immediately becomes a target for pranks, while Charlotte is shocked by the flippant attitude in town towards public bullies picking on a kid in the streets. The butcher simply shrugs it off with "boys will be boys."
That evening, Charlotte's agitation spills over to the dinner table as she brings up the alarming indifference of Derry's residents towards the violence on the streets. Leroy suggests playing it low-key, afraid of drawing unwanted attention and recounts an incident from Shreveport. Uncharacteristically, Charlotte resists the urge to delve deeper.
Meanwhile, Ronnie is haunted by a terrifying vision of being trapped in her mother's womb, drowning and struggling to escape. Birth seems to be a recurring theme in this prequel, and Ronnie's experience is far from comforting. Her mother, with a contorted expression, chastises Ronnie for "breaking her" as if she were breaking her father. As Ronnie attempts to flee, she realizes she is connected to this monstrous creature by an umbilical cord, drawing her closer. The razor-sharp teeth of Ronnie's mother's stomach menacingly appear, ready to pull her in. Thankfully, Hank arrives and the vision subsides.
At the bar, Derry's Chief of Police, later revealed to be Chief Bowers, is drinking when he is threatened by locals to hurry up and arrest Hank for the murders. Meanwhile, Dick and his fellow black soldiers are kicked out of the bar for being too rowdy, stumbling back to base drunk. They are cleared at the front gate with "special permission," hinting at Dick's high rank in the chain of command.
Dick's job appears to be digging for something important, and he has been granted permission from the airbase to excavate numerous sites in a bid to find it. However, the Colonel is growing impatient and demands results. At school, a flustered Ronnie speaks to Lilly at lunch. While Marge tries (and fails) to impress the cool kids by betraying her friend, Ronnie urges Lilly to tell the truth about the monster in the theater.
The crux of the matter lies in Lilly's understanding of the potential consequences. She could be sent back to Juniper Hills, a place ironically deemed the safest for her, yet she dreads the thought of returning. Ronnie's outburst and curses land her a one-way ticket to detention, and Will follows suit when he's blamed for a prankster's stink bomb prank. They both end up in detention, with Lilly taken to the police station.
At the police station, Lilly is confronted by Chief Bowers, who coerces her into changing her story about Hank's presence that night. This leads to Hank's arrest, while Ronnie confronts Lilly about her betrayal. She rages and raves, furious at herself for her actions, but Lilly's mother shuts the door in her face.
Meanwhile, at the airbase, Leroy comes to see Masters and realizes he wasn't the one in his room the other night. Given the speed and precision needed to load and cock the gun in Leroy's face, it doesn't match Masters' profile, who is unwieldy with a gun. Masters proves his innocence when he lays down a loaded pistol and taunts Leroy. After consulting with General Shaw, Leroy decides to file a report with OSI for further investigation.
However, General Shaw confirms that he was the one who stormed his room that night, looking for a man with no fear to help him with a job. The man has passed with flying colors. At the store, Lilly has a chilling encounter while shopping. Strange voices taunt her, and she's watched from afar by the different shoppers. As she walks down the cereal aisle, the boxes hold the faces of those who died and they turn rotten. Predictably, the aisle transforms into a squared prison of pickles, reflecting what we know about the past. One box distorts to show her father's face, and after smashing the jar on the ground, the vision becomes all the more terrifying... until she's snapped out of it by the store manager. The single smashed jar sits on the floor in front of her.
While Lilly is taken to Juniper Hills, General Shaw explains that he's leading an operation to end the Cold War by threatening armies with something that causes fear. This must be related to the entity known as "It," which they're searching for with the dig sites. The entity appears to be surrounded by "beacons," and finding those could lead them closer to "It." Shaw and his team head to the dig-site, where they excavate a car with skeletal remains inside.
