Oh, wow, the wraith really did a number on Storybrooke, didn’t it? It really looks like a hurricane ripped through town. And the reactions of everyone make it look even more like disaster relief, with people putting up posters in an attempt to locate their loved ones and how Ruby/Red is taking charge to provide people aid. Things get even more hectic when the dwarves discover that if anyone crosses Storybrooke’s town line, they will once again lose their memories and revert back to their cursed selves. That knowledge puts people into a panic which only intensifies when they see Regina’s magic has returned in full force.
The main point of this episode involves the people of Storybrooke figuring out who they are. This is highlighted by David/Charming’s struggle to decide who he is- David Nolan of Storybrooke or Prince Charming of the Enchanted Forest. In the end, he realizes that he has to embrace both of his identities, which helps bring him to a place where he can be a strong leader who can properly reassure the frightened people of Storybrooke and encourage them to stay together.
On the other hand, you have Regina, whose story is deep on a different level. As the Enchanted Forest flashback shows, Regina only wants to escape from the influence of her mother, Cora, who is using her magic to prevent her from ever leaving King Leopold’s castle at will. To escape her mother's grip, Regina ends up seeking to learn how to use magic from Rumpelstiltskin, who apparently was the one who taught Cora as well. Once she manages to banish her mother through a magical mirror portal, she informs Rumpelstiltskin that while she is still willing to learn magic, she doesn’t want to become Cora. But in the present day, Regina is slowly starting to realize that he has become just like Cora after all. The fact that she uses the exact same spell to prevent Henry from sneaking out of her mansion that Cora had used on her when she tried to escape King Leopold’s castle really emphasizes the parallel. When Henry tells her ‘I don’t want to be you,’ you really get the feeling Regina is remembering how she’d once said the same thing to Cora years ago. So much so that she allows Henry to go and live with David/Charming. But she is then seen being still unwilling to get rid of the spell book that had started her down the path she’d taken. Eh, baby steps, I suppose.
The episode ends with us seeing the people of Storybrooke beginning to embrace their newfound lives, as well as new goals. The dwarves are determined to locate the diamonds that can make fairy dust within the mines, in order to restore the memories of Mr. Clark/Sneezy once again. Geppetto/Marco is informed by Henry that August/Pinocchio is in Storybrooke, but when he goes up to August’s room at Granny’s, he finds the room empty, with only Pinocchio’s old hat left behind, indicating that while August is now mobile again, something is keeping him from a proper reunion with his father. However, Mr. Gold, because of the issue of how crossing the town line might make him lose his memories, cannot leave Storybrooke the way he wanted to. And of course, David/Charming is no closer to getting Emma and Mary Margret/Snow White back. But then, we get the episode’s OH CRAP moment, when we see Emma and Mary Margret/Snow have been taken prisoner by Mulan and Aurora, who, after taking them to this refugee camp filled with Enchanted Forest folk who escaped from Regina's curse, place them both into a prison pit, where we see they’re accompanied by Cora, who is alive and well. This results in the viewers having only one possible reaction: