Betty is in the middle of forging Don's signature on the back of a check when she discovers that one of her cigarettes is missing. She walks into the hallway, sniffs the air like a bloodhound and follows the smell of smoke over to the bathroom. It's there she catches Sally taking a drag off of a stolen cig before tossing it into the toilet. (Sally looks so cool all of a sudden, for some reason.) Meanwhile Betty's furious, though I'm pretty sure if Sally told her she was doing it to lose some weight, Betty would pay for her next carton. Instead she ends up running her daughter out of the bathroom and trapping her in a closet… until Sally pulls out her gun!

Only instead of a Beretta, it's a metaphorical gun. Made of words. "[Dad] left because you're stupid and mean," Sally snaps. A wounded Betty tells her she can go ahead and sleep in that closet, and that that puddle on the floor isn't water, it's the urine of a recently acquitted pop star who's standing right behind her.

Still back (back) in Cali (Cali), Don steps off a bus sporting sunglasses and a Panama hat, which makes him look not unlike Hannibal Lechter in the final scene from "Silence of the Lambs." Did he come out here to eat somebody? God I hope so. Every show on TV should involve occasional acts of cannibalism. That, or frequent acts of cannibalism.

At Sterling Cooper, the copywriters are mulling over slogan ideas for Popsicle, which I forgot is actually a trademarked brand name, like Frisbee or Dumpster. (Remind me to tell you about the time I was eating a frozen ice pop when I accidentally tossed my favorite flying disc into a large blue trash receptacle. Actually that's the whole story.) Peggy gets all nostalgic, recalling how her mom used to buy one Popsicle and split it up among the kids. "That's kind of Catholic, isn't it?" says Cosgrove, mistaking "Catholic" for "Jewish." And even though she just remembered it herself, Peggy seems immediately, irrationally certain that every mother in America performs this exact same ritual, so she decides to build a campaign around it.

Pete's secretary (and resident Harry-lover) Hildy informs him that his wife has arranged for an adoption agency of high repute to stop by later this week with an orphan catalog or however they do it. Hildy, adorable as always, is super excited that her boss has agreed to go through with this. Only problem: he hasn't. Still disgusted by the mere suggestion of raising someone else's unwanted infant (I mean, who is he, Peggy's sister?), Pete marches home and yells at Trudy ("HELL'S BELLS!!") for making these arrangements behind his back. Then, to reestablish dominance, he puts on his sailboat pajamas and makes her read him TWO stories before bedtime.

Bertram meets with his sister – another one of the Sterling Cooper partners, apparently – about the potential merger Duck set into motion last week. She urges him to accept the offer, because it's going to make them rich as fuck, and you can never have too many kimonos. Still, Bertram doesn't like the idea of handing over his life's work to someone else. Also he promised to take care of Roger, and doesn't want to leave him in the lurch. His sis is less sympathetic toward the latter argument. "Let Roger Sterling have what he always wanted – to die in the arms of a 20 year old," she says. (She hasn't finished watching Season 1 on DVD just yet, so don't spoil it for her.)

Dick Whitman Expository Flashback Time: The lady who dropped by the dealership Don (Dick) worked at a few episodes ago pays a visit to his apartment, demanding to know what happened to her husband Don (Don). So Don (Dick) tells her the truth. He's very apologetic, even offering to give back his purple heart, which is pretty appropriate considering the only injury Dick suffered was minor chaffing as a result of walking around in pee pants.

Back in the present, guess who he's going to see. If you said "same lady," you're stupid for not waiting till the part where I tell you what you win if you're right. Anyway, in case you're bad at math problems involving two and two, this makes her not only the recipient of that phone call last week, but also of the book Don mailed off at the beginning of the season. So, plot twists are fun. (I mean, except for this one.) Anyway, they catch up briefly before he asks to take a shower and lie down.

Joan and her fiancée are about to bang, but when she climbs on top, he halts the proceedings. So, he's gay.

Post-snooze, Don is sitting on the porch with this no-longer-mystery-woman. Name: Anna Draper. It's established that he's been helping her out financially, and that since the events of those initial flashbacks, they've become dear friends. She asks about his kids, and Betty. He tells her about not being able to acknowledge his baby brother, and that there are things he feels comfortable sharing with Anna that he could never tell his wife. "I always felt that we met so that both of our lives could be better," she says. Don's like, "but my life still sucks. Aren't you listening? "

Roger discusses the merger with Bertram. He seems to be the last one to hear about it, but doesn't know that. He's also really enthusiastic about it, blissfully unaware that this could apparently result in a royal screwing on his behalf. Bertram says all the partners will meet later to discuss.

Pete's father-in-law calls and says he hates to have to do this, but he's putting the Clearasil account "up for review." How can that be, Pete says, when sales have been soaring? Trudy's dad is like, "yeaaaah but you're a shitty husband, so." Pete can't believe he's being strong armed like this, so he cancels the Clearasil account altogether. That showed him, I guess?

In another flashback. Don and Anna are spending Christmas together, and he tells her about meeting Betty. For maybe the first time in the entire series, he seems truly infatuated with her. He says he plans on popping the question, but needs a divorce from Anna first. She agrees, and Don's all like, "sweet, let's stay best fweyends fow-eva," and Anna's like, "you're insane dude. I'll see you back in the present."

Peggy pitches to the Popsicle people with an idyllic anecdote that sounds not unlike something Don would come up with. Her slogan: "Take it, break it, share it, love it." It must work fast, because the execs indeed "love it."

Betty phones her equestrian friend Sara Beth under the guise of inquiring about private school options for Sally, then takes a sledgehammer to subtlety by mentioning Arthur's soon-to-be wedding. Feigning indifference at first before confessing that they totally did it and she totally fell for him, Sara Beth admits she's been tearing herself up over the impending nuptials. Then, in a surprising-for-anyone-but-her 180, Betty gets all callous and judgmental, asking her friend why she'd ever stoop so low as to cheat on her husband, even though it was Betty who set the whole thing up. Sara Beth calls her horrible, and she is, but doesn't really give a shit.

My favorite scene in the episode is next, as Peggy asks Roger for Freddy Rumsen's old office. He admires her balls (not literally), and says it's all hers. So awesome. She'll also be getting a secretary, whose first task, I imagine, will be to get rid of that month-old piss smell in the corner.

Joan walks up with her fiancée and introduces him around a little. Roger, of course, makes a comment about French food that strongly implies he and Joan used to bone. The fiancée notices but shrugs it off, then he takes Joan into Don's office and rapes her.

No, that's not a typo. I did not mean to say, "kisses her gently on the neck and takes her out for a wonderful dinner." He rapes her. His fiancée. It's a pretty startling scene, and the blank look on Joan's face is disturbing, to say the least. She sure has gotten the short end of things lately.

The partners meet about the merger, except for Don. But that's ok, because his 12 percent makes him "mathematically insignificant," says BURNtram. The vote is a unanimous "let's do this," but after everyone clears out of the conference room, Bertram remains, looking melancholy, like he just got raped by his fiancée or something.

In an all-too-common pre-divorce move, Betty makes a play for Sally's affections with a gift, and by treating her like "a big girl" (but not "big" meaning "fat" like she usually does). She tells her the truth about what's going on with Don, and admits that she has no idea where he is, or when he's coming home.

Meanwhile, still on the lam from reality, Don expresses interest in finding work with some local grease monkeys. Then Anna does a tarot card reading on him, because she thinks she's psychic, because she's from California. "The only thing keeping you from being happy," she says, "is the belief that you are alone" Profound.

Paul (back from annoying the shit out of not one but two races somewhere down in Mississippi), Ken and Harry complain about Peggy's new office, which only makes her more proud of it. Pete walks in to find her having a celebratory drink. "How the hell did you swing this?" he asks, looking legit proud of her. Then Peggy does something amazing: She makes a joke. "I'm sleeping with Don," she says. "It's really working out." Speaking of Don, Peggy asks Pete if something happened in Los Angeles, and Pete says he just "disappeared." He tells her Don's done this before, and that he may not be coming back. She responds that, whatever he's doing, it's for a reason.

Meanwhile, back in Cali, we see Don's reason: He just really, really wanted to walk chest-deep in the ocean.