Two men carrying small bundles swim across a muddy river. Once ashore, one of them stumbles and turns to find he's tripped over a dental grill encased in a Lucite cube: Hank Schrader's souvenir from his encounter with Tuco Salamanca.
At home, Skyler White tells Walt that the three-day hospital stay following his fugue state cost an additional $13,000. She asks if this is something Elliott and Gretchen Schwartz could cover in addition to his cancer treatment. He tells her they will, and promises to handle it. That night, he counts his drug money, realizing that after everything he's been through he has almost nothing. Later, Walt retches into the toilet and finds it's clogged when he tries to flush. As he plunges, up floats a pack of cigarettes.
At the office the next day, Hank Schrader tells his boss George Merkert that so far no one has filled the meth-supply void created by Tuco's death, though agents keep hearing the name "Heisenberg" on the street. Praising Hank for his sharklike qualities, Merkert gives him a promotion to the Tri-State Border Interdiction Task Force. He'll now be splitting his time between El Paso and Albuquerque. On the elevator down to a congratulatory lunch, Hank suffers a panic attack, and struggles to breathe.
"You're even dumber than I thought," Clovis tells Jesse Pinkman when he shows up at the repair yard. Jesse pays him for services rendered and damages to his fence and toilet, then makes a deal to stash the RV at the yard and buys a used 1986 Toyota Tercel.
Searching for an apartment, Jesse meets Jane Margolis, a droll chick with blue eyes and longish black hair who manages a duplex. She asks Jesse to provide proof of employment and a former address to rent the space, but cuts him a break when he tells her about his parents kicking him out of his house because he's a disappointment. She raises the rent, though, and demands more money up front. "D.B.A.A.," she warns him. "Don’t Be An Asshole."
Marie Schrader expresses dismay when she discovers Hank has called in sick the day after his promotion so he can brew "Schraderbräu" beer in his "man cave," the garage. While he's capping bottles of beer, one shatters and cuts his hand.
Out in the desert, Walt and Jesse cook meth and quarrel about their partnership. Walt wants Jesse to sell small quantities again to avoid dealing with "yet another homicidal lunatic," like Tuco. Jesse protests, saying the "DEA's up my ass," so he can't be out on the street himself. "We gotta be Tuco" and distribute the product ourselves, Jesse says. Walt rejects this strategy, but Jesse says that he's making all the business decisions again, or he'll walk. "I sure as hell didn't find myself locked in a trunk or on my knees with a gun to my head before your greedy old ass came along," Jesse says. "You need me more than I need you."
Setting out pretzels and soda in his new apartment, Jesse presents a business opportunity to Skinny Pete, Badger, and Combo. He'll front them each an ounce at a time of "the best schizz ever" and they sell it for $2,500. $2,000 goes to Jesse, their cut is $500. "This is the ground floor," he tells them. "D.B.A.A., Mo Fos."
Walt's family visits Hank and Marie. Alone with her sister, Skyler demands she apologize — "now or never" — for stealing the baby tiara and nearly getting Skyler arrested. Marie resists at first, but tearfully apologizes when Skyler says, "I need my sister back." Meanwhile, Walt listens as Hank regales Walter Jr. with the story of his confrontation with Tuco. Hank compares criminals to cockroaches: If you see one, "you don't think about it. You stomp him down."
Badger, Combo, and Skinny Pete sell Jesse's meth all over town. Everything goes fine until Skinny Pete is held up by a pair of junkies who make off with an ounce of meth. "What the hell do you want me to do?" Jesse later asks Walt, arguing that they need to accept a little "breakage" as the cost of doing business — "like K-mart." "You think Tuco had 'breakage?'" Walt asks. "I guess it's true. He did. He broke bones."
Back at his house, Walt shows Skyler the crumpled cigarette package he retrieved from the toilet, and accusingly asks if she knows anything about it. "Perhaps," she responds. "And then again, perhaps I don't, Walt. Perhaps I smoked them in a fugue state."
Skyler admits to having smoked three-and-a-half cigarettes before disposing of the pack and says that of course she feels ashamed. "This is so unlike you," Walt says. "How would you know?" she replies.
That night, Hank and Marie are awakened to loud gunshot-like pops coming from inside the house. Gun drawn, he heads to the garage, visibly shaken, only to his relief to find that it's just the sound of his Schraderbräu bottles exploding due to the pressure.
Walt shows up at Jesse's apartment, handing him the gun Jesse bought to defend himself against Tuco. "You asked me what I want you to do," Walt says. "I want you to handle it."
In daylight, Hank stands at a river's edge, takes a deep breath, and heaves Tuco's grill into the water.
- Lawrence Gilligan as DEA Agent
- Tavia Schwartz as Bad Girl
- Malcolm Ullery as Skycap
- "Hook 'Em Horns" by Johnny Ringo (playing in Jesse's new car as he pulls up outside Jane's apartments)
- "Schraderbräu" by Dean Norris (as Hank) (Hank sings as he bottles his home brew, Schraderbräu, in his garage)
- "Lonesome Road" by Big Jack Johnson (with Kim Wilson and Pinetop Perkins) (in the background, outside at Hank and Marie's house)
- "Peanut Vendor" by Alvin "Red" Tyler (during the montage where Badger, Combo, and Skinny Pete sell the meth)
- The title of the episode comes from the conversation between Jesse and Walter, during which Jesse explains that Skinny Pete's incident was "Breakage." It is also a symbolism of Walter's change into a Tuco figure, insisting that revenge be taken, and his inevitable resemblance to Gus. Heisenberg has broken loose. It is also symbolism of Hank's mental breakdown from post traumatic stress disorder stemming from his shootout with Tuco, as well as Skyler's smoking problem.
- In the scene where Jesse discusses the new business arrangement with Skinny Pete, Badger and Combo there is a slight continuity error. Combo takes the cap off the soda and as the camera cuts to behind Combo the lid is back on the soda. It then cuts back to in front of him and the lid is off. Then the camera cuts again and we see Combo take the lid off again.