In a flashback to 1991, we meet Henry's old partner, Lou Gamble, whom Shawn convinces to tell the story of the missing girl named Veronica Towne the SBPD is investigating. She was last seen by the place she used to work, a lounge called The Blue Derby. She was wearing a red dress and a gold necklace with her initials on it. They think her killer is her boss at The Blue Derby, Jordon Beaumont.
We then come up on present day at a crime scene where the SBPD, Shawn and Gus are investigating the dead body of a 70 year-old man at a local construction site. In the distance, Shawn notices a worker digging and sees that another dead body is being unintentionally unearthed. He takes a closer look and immediately determines that body matches the same exact description of the woman that went missing back in 1991, the same woman that Lou described to Shawn in the flashback. From this, Shawn determines that the woman who went missing in 1991, Veronica Towne, is the same woman who was just found dead at this crime scene.
Woody the coroner determines that the body does indeed belong to Veronica and that she was strangled. From this, Henry predicts that the culprit must have been Veronica's hotheaded boyfriend at the time, Jordan Beaumont. In fact, she was last seen arguing with him in front of The Blue Derby. He goes on to tell the group that he and his late partner Lou were detectives on the case twenty years ago. He also tells them they never got enough evidence to arrest him and the case has gone unsolved all these years.
Woody figures out from his report that the body of the 70 year-old man found at the same site belonged to Ellis Beaumont, father to Jordan, Veronica's ex-boyfriend. The SBPD now believe that it was Jordan who killed both Veronica and his father Ellis. Henry gets approval from Vick to be detective on this case, as he desperately wants to finish solving what he and Lou never got the chance to.
Shawn, Gus and Henry show up at the Beaumont estate, where Jordan is currently living, to get some answers. Jordan tells them that he didn't kill Ellis or Veronica and that he has an alibi. He says he was with the woman he is dating, Thea Evans.
They then go to meet Thea, who is staying at the Beaumont's hotel property and who bears a striking resemblance to Veronica. From this meeting, Shawn determines that Jordan's alibi isn't as solid as he thought it was. Jordan arrived at the hotel to see Thea at 9 PM and the murder took place 6 PM. However, Shawn's doubts about Jordan are overshadowed by the fact that it was just discovered that Lou's DNA was found on Veronica's body.
From there, Henry, Gus and Shawn pay a visit to Lou's widow Bea. She eventually admits that she received threatening phone calls from a mysterious man with a deep, raspy voice. She also admits that she received a strange envelope containing candid photos taken of her and reveals that Lou had taken a second job working security at The Blue Derby.
They go to The Blue Derby and meet Ida Lane, who immediately recognizes Henry. Ida tells the guys that she barely knew Veronica because she was never there and was always getting special treatment from the owner, like taking 6 months off and returning to her shifts like nothing happened. The last time Ida saw Veronica, she crying hysterically saying things like, "I will not do this alone!"
Then our guys discover that The Blue Derby wasn't just a lounge, that it was actually a place where they made crack cocaine, and that Lou may have been in on it.
They return to the SBPD to tell Chief Vick that Ellis was using The Blue Derby to make crack. They decide to bring Jordan back in for questioning. Just then, Shawn gets a call from a mysterious man telling him to stay far away from the Towne case.
Shawn and Gus visit Woody and learn that he discovered Veronica had given birth three months before her death. From this, Shawn believes that it was Jordan who impregnated Veronica, sent her away, and when she returned wanting more, he killed her and had the cops cover it up.
Then Shawn and Gus discover a manila envelope containing candid shots of Juliet, much like the ones they saw of Bea. They immediately head to see if Jules in danger. Juliet is OK, but Shawn goes on to explain the photos and the strange phone calls he has been receiving. Juliet is instructed to stay home under police protection until Jordan is caught.