Clad in a business suit, Xander arrives at the Summers house. In attempts to calm Buffy's nerves, Xander reviews the plans for the newly rebuilt Sunnydale High, confirming that every possible effort was taken to make sure the school was as guarded against evil as possible. He also reveals that the Hellmouth is located under the principal's office now instead of the library. Buffy checks to make sure Dawn is ready for the first day of school and gives her sister a special "weapon." Xander drops the Summers girls off at the new school and as Buffy tries to let go of her own personal experiences at the high school. The new principal, Robin Wood, welcomes them and then Buffy lets Dawn go off on her own.
After the students have started their classes, Buffy walks alone around the school's quiet and empty halls until a basketball is thrown across her path into a locker. She follows the young teen that threw it, but looses track of him. In the bathroom, Buffy finds a strange object on the counter and then two creatures appear to her briefly and try to scare her away. Dawn introduces herself to the class, but is interrupted by her overreactive sister who barges into the class announcing that it's not safe for them. Realizing her mistake, Buffy tries fix it, but the damage to Dawn's social life has been done.
Anya and Hallie have drinks at the coffee house while they watch a couple of singers perform. Hallie points out that Anya is losing her "evil" touch and that she needs to start acting more like a Vengeance demon because something evil and incredibly old is about to surface and Anya cannot afford to be borderline evil. Buffy reports to Xander about what she saw in the bathroom and worries that the return of Sunnydale High School is a sign of something bad. A student asks Dawn for a pencil and Dawn hands him one only to have the student be a zombie creature that stabs her in the face with the pencil. Dawn freaks out and as all eyes in the classroom turn on her, she realizes she's not injured and excuses herself to the bathroom to recover from the second major embarrassment of the day.
Dawn finds another student in the bathroom crying in one of the stalls because she thinks there are others in the bathroom with them. Dawn tries to comfort and befriend the girl, Kit, but the zombie creatures appear in the mirrors and the girls are pulled through the bathroom floor to the basement below. Meanwhile, Principal Wood finds Buffy roaming the halls and starts up a conversation about Buffy and her history at the school. In England, Willow suddenly starts to freak out and Giles tries to comfort her. She reveals that she felt evil from the earth, specifically the Hellmouth reopening.
Kit wakes Dawn and as the two search for an escape from the basement, they run into another living student, Carlos. Before they can get to know each other or find the way out, a janitor and two student zombie creatures surround them and offer threats and cryptic warnings about there not being an escape or help for them. Buffy tries to explain her colorful record to the principal and out of fear for her sister, attempts to convince him that Dawn's trouble and doesn't belong at the school. After receiving a cell phone call from Dawn, Buffy finds her way to the basement to rescue her sister. While waiting for her sister to find them, Dawn is grabbed by one of the creatures. Buffy runs into the creatures and learns that they're all mad at her for her failure to save them from their deaths. Buffy is more concerned with finding Dawn and suspects they're trying to keep her from the door behind them, so she fights with them until she gets past.
Instead of finding her sister behind the door though, she encounters Spike. She's stunned and wonders if he's real, but the zombies attack and interrupt. Temporarily rid of the spirits, Buffy focuses on Spike, but he only speaks crazy nonsense that she doesn't understand. Upon closer examination, she finds that his chest is cut up and he explains that he attempted to cut "it" out. While Buffy talks with Dawn on her cell phone, Spike reveals that the zombie creatures are manifest spirits and that a talisman is responsible for their vengeful actions. Still confused by him, Buffy rushes off to find Dawn. Remembering the object she saw in the bathroom, Buffy calls Xander on her cell phone. Dawn and the others put together a weapon with Kit's bag and a couple of bricks just in time for the creatures to appear and attack.
Xander makes his way to the girls bathroom and is momentarily pleased to find the large hole in the ground for him to fix later. Buffy finds Dawn and fights off the spirits while she waits for Xander to find the talisman in the bathroom. He does, despite an attack from one of the spirits, and breaks it just in time. Finally back upstairs, Buffy offers some advice to Dawn, Carlos and Kit and the three head off to class together. The principal is impressed with her ability to communicate with the troublemakers, Kit and Carlos. He offers Buffy a low-paying job as a counselor who can reach the students on their own level and Buffy eagerly agrees.
Spike talks out loud seemingly about what he could have done when he saw Buffy and how she'll never understand him. It's revealed that he's not alone as Warren appears and talks to him about how Buffy cannot understand what he is. Warren morphs into Glory who warns that soon she'll be the talk of the world. Glory turns into Adam who announces that everyone is where they should be. The Mayor is the next figure who comments about Spike's soul and then he turns into Drusilla, who proclaims that Spike belongs to her. She turns into the Master, who explains there will be a return to the real beginning in the eventual future. Finally, the figure morphs into Buffy who reveals, "It's about power."
A girl with bright pink hair runs around a building, followed by men in black robes, like the woman in Istanbul. She is grabbed and stabbed with large knives then says, "From beneath you, it devours." Dawn wakes Buffy up from the nightmare where she saw this happen and Buffy questions the meaning of her dream. Elsewhere in Sunnydale, something large tears through the ground. Spike sneaks around in the school basement he calls home, seemingly headed for a rat while he speaks aloud. Everything around him begins to shake and he falls to the ground, screaming. Xander drives Buffy and Dawn to school and they talk about high school and Xander's relationship problems.
Principal Wood introduces Buffy to her new job and cubical where she'll be working. Buffy sneaks down to the basement in search of Spike, but doesn't find him. In England, Willow struggles with the need to return to Sunnydale where she'll be forced to face her friends and the trouble she caused. A taxi awaits her as Giles listens to her verbalize her fears and he convinces her that even if her friends don't want her back, her presence on the Hellmouth will be important. Back in Sunnydale, a woman walks her small dog along the sidewalk, but while her back is turned, something sucks the dog through the pavement and into the ground. She runs away and right into Xander, who takes her to the safety of Buffy's house.
The remaining Scooby Gang console the woman, Nancy, and promise to deal with this unusual creature. Much to everyone's surprise, a cleaned up version of Spike joins them in the living room and offers his assistance in the battle. Spike wants to talk with Buffy, but Dawn and Xander are not happy to see the blond or with the fact that Buffy didn't inform them that she saw Spike earlier. Buffy goes to talk with Spike privately and he offers to help deal with this underground monster. Buffy eventually agrees to let him help, then explains the game plan to the rest of the group. As Spike leaves with Buffy for patrol, Dawn leaves him with a parting threat should he hurt Buffy in any way.
While examining the scene where the dog was eaten, Spike explains that the manifest spirits from the school were the cause of his craziness. Buffy is uncomfortable around him in wake of his attempted rape and he doesn't bother apologizing for what he did, just admits to changing. Xander takes Nancy home and she asks if they can go out sometime. The ground rumbles and a giant worm chases them down a hallway and emerges from the ground with a roar. Once the worm goes away and the two are safe, Nancy starts to talk about her abusive ex-boyfriend and Xander quickly concludes that she made a wish to a vengeance demon.
Buffy and the gang confront Anya at the Bronze and get her to admit to making Nancy's ex-boyfriend Ronnie into a slug monster. Anya suddenly realizes that Spike has a soul but Spike tries to stop her from spilling the news to the rest of the group. He starts to attack Anya and she turns on him, Vengeance demon at the fore. Buffy steps in and beats up on Spike while he hits her back with a verbal assault. The fight sends Nancy on the run alone, but her wormy ex-boyfriend is hot on her trail. Meanwhile, Xander tries to convince Anya to reverse the curse on Ronnie, but it's not something she can do easily.
Buffy arrives in time to rescue Nancy from certain death and before Buffy can begin to battle with the giant worm, Spike intervenes. After a few hits with a metal pole, he goes to stab the worm only to have it turn back into Ronnie's human form before Spike makes contact. Both guys scream in pain as Spike stabs Ronnie in the shoulder. Spike starts to freak out and act crazy again while Buffy calls the paramedics to help Ronnie. Anya and Xander arrive on the scene and Anya knows she will pay a steep price for reversing the spell.
Buffy chases after Spike and finds him in a church. He's confused and speaks metaphors of what he really is to Buffy. He concludes that she's there to use him like she did before, but Buffy is quick to correct him. He tries to explain what he did to get the missing piece that would allow him to become what she wanted. Buffy realizes that he got his soul back and is completely shocked by the revelation. Spike continues to speak of all the voices that are in his head, those from his past and new ones alike. Spike turns to a large cross at the front of the church and drapes himself onto it, letting it burn him. Tears fall from Buffy's eyes as she looks on.