An opening montage shows factory machines putting together a washing machine, which is subsequently packaged and delivered to Lester Nygaard's house. Lester replaces the old, broken machine with the new one, having replaced everything in the basement due to the crime scene that took place in it. He watches as the new washing machine does its job without making any noise or shaking.
Kitty visits Lester's house to let her know what's going on with her family. Chaz is getting ready for the trial, while Gordo will be placed on probation. She is glad to see Chaz go, mainly due to the fact that he "cheated" on her, not so much that he killed Pearl, saying "you don't cheat on Miss Hubbard County." Due to the legal charges, she has to sell a bunch of their belongings. She offers Lester Chaz's hunting gear, which he accepts. He tells her how he had to replace everything in the basement, she tells him he deserves all good things. After she leaves, Lester throws out all of Pearl's belongings.
Molly visits Lou at his coffee shop and tells him she has prepared a presentation for Bill about the case. He tells her more flowers came from Gus. Knudsen calls for Bill in his office to tell him Molly needs to see him. They both go into a meeting room where Molly has her poster board filled with evidence against Lester. Bill apologizes to Molly for his drifter theory, but Molly says he is still wrong. She tries to argue that Lester is the culprit and not Chaz, but Bill insists the case stay closed, telling her to let it go. The Hess case is still open, and is being investigated by someone much less competent, but Bill feels they will get the job done.
At work, Lester gets compliments from Linda on the new suit and tie. She is about to ask him out to dinner, when Gina and her two sons barge into the office. She now knows that she was never going to get the insurance, and threatens Lester to get her the $2,000,000 by the end of the day. She tells Mickey and Moe to beat him up a little to give Lester an incentive. Instead, Lester takes a stapler and jams staples into both their heads and gets everyone to calm down. The three of them leave, Linda is amazed by his performance.
In Fargo, North Dakota, Bill and Webb wait to hear from their supervisor. The supervisor arrives and tells them to follow him. On the elevator, they try to explain the situation, but with no avail. He directs them to the file room and tells them they will be working there now. Bill admits their situation could be worse, and thinks they'll be able to do field work again in two weeks. Webb has a picture of Malvo with an assault rifle, which he tapes to a wall while Bill bounces a tennis ball that he finds sitting on a shelf.
Meanwhile in Duluth, a police officer is seen guarding the door to the room that Wrench is staying in. He gets up to go to the bathroom. There, Malvo sneaks up behind the officer and strangles him to death. Malvo enters Wrench's room and waits for him to wake up. He wakes up, and Malvo tells him about a few people he's worked with that couldn't speak or had one eye. Lone tells him he was the one who killed Numbers, and Wrench tries to get up to kill Malvo, but fails due to being restrained. He tries again when Malvo tells him he also killed off the remaining members of the Fargo mob. He tells Wrench that he and Numbers have come the closest to killing him, and gives him the key to the handcuffs. Malvo tells him to come and find him again if he chooses to escape.
At Lou's, the officers throw a party for Molly in celebration for "finishing" the case. Ida asks Molly where all the flowers are coming from, to which Molly doesn't give a direct answer, but she thinks it's sweet. Ida says Vern was never good at courtship, and thanks Molly for catching the man that killed him. Molly wants to tell her they got the wrong person, but chooses not to. She leaves, and on the way home she passes Lester's workplace, where she watches Lester from outside.
Gus pulls over to the side of a highway to start his patrol. After checking the speed of a passing car with his radar, he decides to call Molly. He tells her he is on patrol, and so far today he has helped a man who got his private parts stuck to a mailbox. He then says he will be attending a hearing tomorrow in regards to the shooting, she tells him to tell the truth, but maybe leave out the part where Molly was the one he shot. He asks her if she wants to go to the logging festival with him and Greta, which she accepts. As they continue to talk, the camera pans off into the woods.
Now in the year 2007, Gus is a mailman, and delivers mail just as he always wanted to. He gets a call from Greta on the walkie-talkie, who asks what they're having for dinner, Gus suggests tacos. Gus returns home to Greta, as well as his pregnant wife Molly. At dinner, Molly reminds him they're going to Ida's on Saturday for the anniversary of Vern's death. Molly later goes up to her room, where she has an even more elaborate version of the evidence poster hanging on the wall. She is still determined to prove Lester is guilty. She calls the FBI office to ask about the man from the Fargo massacre. The man on the phone tells her the case has been long dismissed. He puts the call on a file, but tells her not to expect a call back, due to them being busy, and hangs up.
At the FBI office in Fargo, Bill and Webb are still working in the filing room after a year. There are now dents in the wall from Bill constantly bouncing the tennis ball off them. Bill goes on a monologue, wondering if one were to take a file out of the file room if it would still be called a file room. Webb doesn't really care. The tennis ball accidentally knocks over a poster board on the wall, revealing the picture of Malvo that Webb taped to the wall when they started working in the file room. They both stare at the picture.
At work, Molly is going through files when Bill arrives with his foster son Tahir. Tahir tells her the story of how he came to America, and how he ran into Bill who decided to take him in. Bill didn't question how it happened, saying he likes to think things just work out. Molly wishes that was true. Molly returns home later that night and goes to bed. She tells Gus they're doing good, they have everything they need.
At a casino in Las Vegas, Nevada, Lester and his new wife Linda attend an award ceremony, where Lester wins the Insurance Salesman of the Year award for 2007. On stage, he thanks Linda for helping him through this tough year, and goes on with his speech. There is a dinner after the ceremony. After dinner, Lester and Linda walk to the elevator to go back up to their hotel room. Lester sees a group of women pass by, and decides to stick around for a drink while Linda goes back to their room.
At the bar, Lester orders a drink. Out of the corner of his eye, he spots Malvo, now with white hair, sitting with a group of people at another table. Lester looks around frantically, reverting to his old mannerisms.