At Elena's, Damon fights with her over her chili. Alaric arrives as Damon is teasing her for being in denial and still wearing his necklace. Caroline shows up with more chili and Bonnie. Upstairs, when Jeremy rolls over, he leaps out of his bed when he spots Anna there. He can hear her for once and can't believe she's there. He goes downstairs to reunite with Anna. As they hug, Anna glares. As the girls sort out their chili, Elena's necklace starts to burn her. They head over to a picnic. While Bonnie searches her spell book, Caroline starts asking Elena what the deal with Damon is. The necklace starts floating so they realize it's magical.
Klaus and Stefan are drinking wine in a boutique in Chicago. Rebecca tries on an outfit and complains about how women now dress like prostitutes and listen to music that sounds like a cable car accident. Stefan goes out for some air and spots Katherine. They meet on the corner and he explains he has everything under control. She's not convinced and warns him not to be cocky. He joins up with the other two vamps and they head to the bar to work on finding the necklace with Gloria. It doesn't take her long to locate it. She asks for some space while she works things out. The vamps go out to the warehouse and kill some girls while Klaus teases his little sister. Stefan goes off to see Gloria and asks her about the necklace. She wants it for herself. When she threatens to tell Klaus he's been lying, he tries to attack her but she knocks him down with a spell. She puts him in paralysis, strips off his shirt, lights some candles and starts draining his blood. Gloria begins burning him with vervane to get at his essence. She has visions of Elena and quickly puts everything together. Katherine pops up and stabs Gloria in the throat. She starts advising him to bond with Klaus to make Rebecca jealous. He explains that the siblings have been running from a vampire hunter for centuries. She wants to help him turn Klaus over but he refuses.
Sheriff Forbes meets with Damon. She wants him to compel her ex-husband so he'll get off of Caroline's back. They go down to the crypt and Damon nearly bites Bill. He clears his memory and compels his to leave town. Later, Damon slouches around the Founder's party. Alaric tells him that he has to stop whatever he's doing with Elena and take a beat. Sheriff Forbes asks Damon to join the other families for their usual vampire meetings. Bill walks in and asks Damon, Carol and Forbes if the rest of the counsel are clueless. Caroline spots him and runs off. As Elena and Alaric leave, Damon follows them and explains that Bill can't be compelled. He wants to put vervane in the water supply so Damon wants to kill him. Ric forbids it so Damon breaks his neck. He returns to the house to confront Bill. After some verbal sparring, Damon chews on him.
Back in Chicago, Stefan and Rebecca are in the crypt. They chat and he tries to get her to discuss the man she's been running from. She changes the subject to Elena and other things. Rebecca pulls him into a kiss. She realizes he's been lying. Klaus returns and she tells her brother that Stefan's not on their side. Klaus knocks him out and puts him in a truck. When he comes to, Klaus opens the truck and reveals they're back in Mystic Falls.
Jeremy meets with Anna in the house. She explains they are pushing and pulling on each side of their separate worlds. She warns him again to be careful about Vicki. They're shocked when they discover they can touch hands. Later, he spends time with Bonnie and they go through her books. When he picks up the necklace, the books start to burn. Bonnie puts them out. As he cleans up, Anna returns. He wishes she would start popping up but she points out it only happens when he thinks of her. She guesses he doesn't want Bonnie to know he still cares. He decides to push Anna out of his mind and returns to Bonnie. As he starts explaining that he's changed, Anna cries for his help.
When Tyler goes home, he finds Caroline waiting in his room. She complains about her dad and then they jump into bed. Elena calls with an emergency. Caroline rushes to the house and finds Damon chomping on her dad. She shoves him out of the way and offers her dad her blood. Elena arrives as Damon and Caroline pound on each other. She kicks him into the wall and leaves with her dad. Elena tries browbeating Damon and he plods off, telling her that he's not Stefan. The next morning, Alaric revives. "No hard feelings," Damon says. Ric thinks he's a dick. He goes to see Carol and the Sheriff, pointing out that they both have a conflict of interest so he's joining the counsel. At least then someone can look out for the actual people in town. Meanwhile, Caroline accuses Elena of letting Damon get under her skin. Elena can't admit that. Caroline spots her dad and walks over to him. He explains he's going home and thanks her for rescuing him. She assures him she'll be okay. "You're a vampire sweetheart. You'll never be okay again," he says. Across town, Katherine shows up on Damon's doorstep and asks him if he wants to hit the road. She waves the necklace she just lifted from Bonnie at him.
Cryptic commentary: Stefan and Rebecca actually look really good together, but I don't think that's going to happen. Gloria was fun while she lasted. However, I'm happy to see Katherine back, if only because it means a little less air time for downer Elena. I was glad that Ric was finally stepping up against Damon. Seeing ghost Anna has been very sad though. I never realized what a screwy relationship Jeremy has with Bonnie. She brought him back from the dead then didn't bother having a real conversation with him for months. She seems to just like him around to carry her books.