Lassiter and Juliet are at the scene of a possible suicide with Gus, Shawn and Abigail. It appears the victim hung himself, but Shawn sees signs of murder and discovers dog tags stuffed down the dead man's throat. This is not just a murder now, it's a military crime, which poses jurisdictional problems. But Juliet says she knows someone who might be able to help with that, and she calls her brother Ewan, an ex-military man who is now hired out by the government for covert missions.
Juliet and Lassiter meet Gus at a vehicle storage yard in the middle of the night. Gus received a message from Shawn telling him that he’d solved the case and to meet him there but Shawn has not shown up and Gus is worried. He should be. Shawn is currently bound and stuffed into the trunk of a moving car. Shawn remembers a lesson Henry taught him as a child, and kicks out the rear light of the vehicle. Through the hole in the trunk, he’s able to spot some landmark, and manages to text Gus cryptic descriptions of what he sees. Back at the storage yard, Gus is puzzled by the message.
Stewart Gimbley bursts into the Psych office looking for help. He went to the police first but was referred to Shawn and Gus instead. Stewart wants the guys to lock him up and observe him overnight. He gives them a gun with silver bullets for their protection, because Stewart believes he's a werewolf. He thinks he killed a lamb last night and is worried that tonight he'll do worse. He offers them three times their rate, which they readily accept, thinking this will be easy money. They tie Stewart up but then fall asleep themselves, only to wake up to the sound of the window shattering.
A man on a bike pedals for his life, being chased by armed assailants. He reaches his apartment building, drops his bike and runs inside. He pulls a digital camcorder from his backpack and is able to email out its contents before the men break in and asphyxiate him. This man, it turns out, is Leonard “Diddle” Callahan, and a college friend of Gus’. Shawn and Gus attend Doddle’s funeral, where the minister says Diddle died from a hit and run accident on his bike.
Raj waits in an alley to meet his girlfriend Mina, a dancer in a local Bollywood production, who he has been secretly dating. She sneaks outside on a break from the show, but is nearly killed when a runaway truck narrowly misses her. A distraught Raj goes to the police station, where he confesses to not only hurting Mina, but all of the women he has loved. He claims he’s cursed.
After a police department baseball game, the whole gang goes to a bar to celebrate McNab's birthday. But, as the waiters bring out the cake, Shawn spots a hooded man by the register with a bulge in his jacket. He runs to warn Lassiter who pulls out his weapons just as the hooded man starts to fire. After a barrage of bullets, the man manages to escape. The cops think it was an attempted robbery but Shawn says the man came there specifically to kill one of them.
After Agatha, a student at a Catholic college, jumps off the roof of a building, Gus drags Shawn to the school to investigate as a favor to an old teacher, Father Westley. Lassiter and Juliet are already there speaking with Westley and headmaster Father Bard, who explain that Agatha was a model student until three weeks ago when she suddenly started acting irrationally. Lassiter thinks it's murder but Shawn is leaning towards suicide. Father Westley has an alternate theory. He believes she was possessed.
Lassiter needs Shawn and Gus' help. Unexplained things have been happening in a small town outside his jurisdiction. Sheriff Hank is an old friend of his and since Shawn and Gus have a talent for finding something out of nothing, Lassiter enlists their services to uncover the truth about the strange occurrences. Hank explains to them that wooden fence posts around the town have been stolen, someone has poisoned the water and there's a stench in the air that Gus attributes to cat urine. But as Hank shows them around, they realize that Old Sonora is not a real town.
Chief Vick calls Shawn and Gus to the forest to aid in the search for billionaire Warren Clayton's downed plane. They arrive at the wreckage before the police and find Clayton inside, barely alive. As Gus tries to call for help, Shawn notices a "Wiswall" insignia inside the plane. He also sees that the altimeter reads 118 and spots metal clip with a picture of St. Dwynwen on it. As Clayton starts to fade, he says something about wanting to make amends and be a good father. He manages to cough out the word "Waterloo," then in his last breath asks them to find out who killed him.
Shawn and Gus are on the slopes on their ski vacation in Whistler, British Columbia when Shawn spots wanted international art thief Pierre Despereaux. Despereaux is so good, he's never left enough evidence behind to be formally accused and so promptly gives Shawn and Gus the slip. Shawn goes to the Mounties for help, who need very little convincing of his psychic abilities. Deputy Commissioner Dykstra calls Lassiter to ask for Despereaux's files to be sent up, and Lassiter insists on being part of the investigation. Lassiter and Juliet arrive in Canada just in time to meet Shawn and Gus