A prison guard gives Luis and Fancy some alone time together. However, he is also on Sheridan's payroll and has a camera set up so she can spy on the couple. Sheridan's rage is interrupted when the blackmailer shows up for a visit...
Ethan mulls over some of the things Gwen said about his relationship with Theresa. He wonders: if she really loved him, why did she agree to the blackmailer's request to marry another man?
Rebecca assumes Gwen has returned to Harmony to reclaim Ethan. When Jared comes looking for Theresa, Gwen suggests he go to the Russell house. As Gwen anticipated, Jared catches Ethan and Theresa kissing.
The demon elf demands payment from Kay before he finds Jessica. Tabitha warns Kay that the imp is not to be trusted. Meanwhile, time is running out for buried Jessica.
When Jared demands to know whether Theresa still loves Ethan, she proves her devotion by making love to him. Gwen and Ethan overhear them in the hallway.
The blackmailer proposes a deal to Sheridan; he will deliver Pretty, and get rid of Fancy forever, if Sheridan kills Theresa! Though Sheridan thinks the price is too high, she is tempted.
Jessica and her baby transcend their grave in spectral form and watch as everyone searches for them, knowing they're too late. Sam threatens to bury Spike alive if he doesn't reveal where Jessica is. Kay and Tabitha follow the Demon Elf, who leads them to Jessica.
In the forest, Sam and Noah work desperately to revive Jessica while Miguel, Paloma, Simone, a handcuffed Spike and several police officers look on. A few feet away, Kay and Tabitha watch helplessly as the demon elf who believes that Jessica is dead, lets his evil mignons fly off to bedevil the folks in Harmony. Sheridan is in her cottage talking to the blackmailer when one of the demons possesses her. Her eyes turn black and she immediately falls in with the blackmailer's plans for her to kill Theresa. Jared is asleep in the master bedroom of the Crane mansion when he is invaded by a demon. He opens black eyes and mumbles that he must kill Ethan. He gets out of bed and goes downstairs. Gwen is standing by the terrace door eavesdropping on a conversation between Ethan and Theresa when evil enters her. Rebecca walks up to her as she is muttering that she will kill Theresa. Rebecca likes that idea and begins suggesting methods to use. Gwen turns on Rebecca and starts strangling her.
Dr. Eve arrives at Jessica's side, and begins to give her oxygen. Jessica coughs and starts breathing. Spike pretends phony concern and tries to get Jessica to alibi for him like she has so often in the past. It does not work this time. Jessica shows some spine. She slaps him and tells Sam that Spike drugged her and buried her alive.
Because Jessica revived, evil is diminished and the demon elf's evil brigade does not have enough power to keep possession of Sheridan, Eve and Jared, who come to their senses and let go of their murderous thoughts. Gwen remembers nothing, but she is not happy about Ethan being with Theresa. Sheridan recants that she will kill Theresa. The blackmailer gets angry and tries to strangle her. Sheridan breaks its grip and flips off the blackmailer's mask. Now Sheridan knows who the half man half woman is. She starts to call Sam, but the blackmailer points out that Fancy will get Luis for sure, so Sheridan hesitates to make the call. Jared comes to his senses and wonders why he is in the living room. He also wonders where Theresa is and spies her in the conservatory with Ethan. He listens to Theresa and Ethan through one open door as Gwen and Rebecca listen from another. None of them notice each other.
Spike is taken to jail and the demon elf follows. Kay, as usual, thinks she knows what is best and sees no further threat. She is convinced that she is smarter than the demon elf. Tabitha is not so sure so she places a protection spell on all her doors and windows. She gets a warning from the boys in the basement that she or Endora may be in jeopardy. At the jail, Jessica is pronounced fit to go home and Miguel offers to drive her. The demo elf sniffs out Spike and uncovers all his evil machinations. He is thrilled, because Spike fits the bill. He has plenty of evil to power all the demons from hell. He tells his demon companions to possess Spike. They do. Spike writhes on the floor as the take him over. When their possession is complete, he looks, with black eyes, at the officer who is guarding him and lets out an evil laugh.
At the mansion, Ethan tells Theresa that he cannot take anymore. He loves her, but Gwen is right, he has to go away from her. Gwen and Jared like hearing that. Ethan tells Theresa that he had intended on asking her a question that night, but will not do that now. Theresa insists on hearing the question. Instead, Ethan shows her a huge diamond rings and says that he know that she loves Jared and that they can never be. Jared and Gwen gloat. Before Ethan can leave, Theresa says, "Yes." Yes she will marry Ethan. They kiss passionately. Gwen and Jared are livid. Just at that moment, the demons, which have been growing stronger, possess Gwen and Jared again. Their eyes go black as they declare their intent to kill their nemeses. Sheridan is also repossessed and begins plotting with the blackmailer to kill Theresa and bring Pretty to town to wreck Luis' relationship with Fancy.
Sam goes to Spike's cell and finds that Spike is gone. His cell door is twisted and has been ripped off its hinges. He finds the officer who had been guarding Spike unconscious and tied to Spike's bed, which has been ripped from the floor and propped upright against a wall.
Tabitha continues to try to talk sense into Kay when it comes to not using her powers but Kay is too anxious and won't stop. Tabitha shows Endora how to cast spells to ward off any evil that may be aimed toward them. Kay goes to Fox in hopes that she can cure his illness. After putting a spell on him, Fox falls asleep so Kay goes to find Miguel. The demon elf reappears and is able to steal the powers from the spell that Kay cast and use them to his own evil by sending demons over all of Harmony. The first demon possesses Fox and leads him to where Kay is making out with Miguel. Once he finds her, Fox says to himself that Miguel must die. Tabitha takes Endora to school and comes face to face with Good Witch Esmeralda.
Theresa has accepted Ethan's marriage proposal and they can't keep their hands off each other. However, when Theresa stops Ethan from telling Jared, Ethan becomes skeptical. Theresa reassures him that once the blackmailer is out of the picture then Jared can be told at that time. Whitney finds Theresa and Ethan leaves the friends alone. Theresa shares her exciting news but Whitney is concerned that Theresa and Ethan won't have the happily ever after they both desire. Jared is upstairs trying to figure out if the image he has of seeing Ethan and Theresa liplocked the night before was reality or just a dream. He becomes enraged when he realizes that it was reality. Just as the demons possessed Fox, one now possesses Jared. After finding Ethan, Jared begins beating on him. Ethan realizes that something is not right with Jared's look or the fact that Jared has amazing strength. Theresa comes in the room to break her two men up but Jared knocks Theresa unconscious.
Kay is beside herself with her newfound powers. She cannot stop casting spells, which is backfiring constantly. Her latest mishap has unleashed evil in Harmony. One of her spells has conjured up an evil elf, who is determined to spread evil all over Harmony. His minions feed off Kay's "not so perfect" spells and seek out people who are angry then encourage them to do evil acts such as committing murder. The first victim is Jared. Seeing Theresa accepting Ethan's proposal enrages Jared, and he is determined to kill Ethan. He is possessed with evil the little elf has spread across Harmony. Rebecca and Gwen walk in on Jared beating Ethan senselessly. They also see Theresa on the floor, who was thrown by a possessed Jared, and Rebecca jokingly mentions calling for help. Gwen, who is possessed with evil, tells Rebecca that she would rather die than helping. Jared comes to his senses and does not remember what he just did. Gwen realizes that Ethan cares deeply for Theresa and Jared does not have a chance with Theresa. Rebecca directs Gwen's attention to the missing USB stick. She thinks that if she knows all the secrets, it will give her an upper hand. Theresa wants to find the blackmailer so that she can figure out a way to end his madness. Jared wants to find the blackmail himself, but Theresa is afraid that Jared might discover the truth. Rebecca asks Gwen if she is bothered that Theresa might end up with Ethan, and Gwen tells Rebecca that she has nothing to worry about because Theresa will be dead. Gwen is possessed by an evil force, and all she wants to do is kill Theresa. Another victim of the elf's evil is Fox. He sees Miguel making love to Kay, and that sets off his rage. He proceeds to attack Miguel with the intent to kill him. Julian & Kay try to intervene but to no avail. The fighting finally ended, and Julian tells Miguel the deal Kay made to keep him out of prison. Miguel is grateful that Kay has sacrificed being with Fox just to keep him out of prison. Fox sees Miguel hanging all over Kay, so Julian decides to call off the deal with Kay since she has gone back on her word and was willing to have sex with Miguel when she was warned to stay away from him.
Due to the evil Kay has unleashed on Harmony, Tabitha feels the need to protect Endora, so she sought out a good witch, Esmeralda, for help. Tabitha takes a trip down memory lane to reflect on her memories with Esmeralda. Tabitha was very odd and did not fit in, so Esmeralda aided her so that she could adjust. All Tabitha wanted was to be noticed, so she learned black magic. She decided to be herself, and she became more powerful than all the other good witches. Tabitha leaves Endora in Esmeralda's care.
Eve tells Whitney the good news. Apparently, Valerie has found her son and is setting up a meeting. Eve is so excited even though she has not met her son yet. Whitney goes to check on Miles and thinks he is kidnapped. Eve explains to her that She left Miles with Chad, but Whitney is upset. She immediately calls Chief Bennett to report that Miles has been kidnapped. She hates that Miles is with Chad, but Eve thinks that Miles deserves to spend time with his father. Whitney is determined to keep Chad out of Mile's life.