Walt finds out that selling meth "one 'teenth at a time" is not fast enough to pay for his treatment on time. As per their agreement, he more-or-less orders a very reluctant Jesse to see if he can find a big time distributor to work with. Jesse manages through one of his friends, Skinny Pete, to get an audience with Tuco Salamanca, a local gang leader who sits on the bulk of the drug market in South Valley.
Meanwhile, Jesse finally figures out that Walt has cancer after seeing the chemo "dot" on Walt's chest at the RV.
Tuco, while loving the hell out of Walt and Jesse's product, is very opposed to paying the $35,000 Jesse demands up front. This outrages Jesse, and his protest at this angers Tuco, and Jesse is beaten within an inch of his life.
Hank meanwhile follows the gas mask lead back to the high school, where he shows his findings to Walt. Walt then shows him around the chemical equipment room, where Hank discovers that several items are missing. Fortunately for Walt, Hank's main suspect is a school janitor, Hugo Archuleta. But when Walt later joins Hank for a poker game, he informs Walt that all he was able to pin on Hugo was carrying a small amount of marijuana, and he was very likely not the one who stole the equipment.
Walt now both finds out that he is starting to lose his hair from the treatment and that Jesse has been beaten up. He visits Jesse in the hospital, and at Jesse's bedside meets Skinny Pete, who recognizes him as Jesse's cook. Walt then asks Pete to tell him all he knows about Tuco.
The next morning, Walt shaves himself bald, much to Skyler's shock and Walt Jr.'s admiration. He drives up to Tuco's hangout, where he introduces himself as "Heisenberg," and manages, through putting an imposing demeanor and showing Tuco's guards a bag of (supposed) meth he has brought along, to talk his way inside. Finally standing face to face with Tuco, he demands $50,000 from him, payment for the meth Tuco stole and Jesse's pain and suffering. Tuco laughs at the fact that he just beat up Jesse, and here comes his partner with more meth. Walt, however, calmly takes one of the crystals from the bag he brought along and says, "This is not meth," before throwing it to the floor.
An explosion emits from Tuco's office and all the windows break. A shaken Tuco and his mooks point their guns at Walt and asks him if he is crazy, but Walt now stands with the bag in his hand and asks them if they really want to find out, as he threatens to drop all of it and cause an even bigger explosion. Tuco, now completely scared of Walt, gives him the money and tells him that the meth sold very well, and even asks if Walt can bring him a new shipment. Walt merely snarls, "Money up front!" and Tuco agrees, saying that they now have an understanding before asking Walt what he just used to cause the explosion. "Fulminated mercury," replies Walt. "A little tweak of chemistry."
In his car, Walt growls in victory as he clutches his recently earned wealth, high on the rush of what he has just accomplished. He then regain his composure and drives away, as police sirens can be heard in the distance.
This episode provides examples of:
- Ax-Crazy: Tuco, who puts out a cigarette on his tongue, snorts meth off a large knife blade, and has a hair-trigger temper.
- Bald of Awesome: The first time we see Walt without his hair, he's storming out of Tuco's blazing office with the deal money in hand. Said office is burning because Walt set off a mercury bomb partly to get Tuco to take him and Jesse seriously, and partly in revenge for Jesse's beating, counting it as this...
- Bald of Evil: ...and this, as the attack and deal with Tuco is another step in the dark direction Walt's life is taking. This episode starts his iconic bald look for the rest of the series.
- Badass Bookworm: Heisenberg owns Tuco and his goons, despite their underestimating him.
- Can't Get Away with Nuthin': Hugo gets arrested and fired for an ounce of marijuana in his possession and for minor misdemeanors on his record.
- Chekhov's Lecture: Walt is in class at the beginning of the episode giving his students a lecture on fulminated mercury being a prime example of an explosion. Guess what causes an explosion in Tuco's hideout...
- Dramatic Irony: The Cold Open in spades. While Walt is laying down the rules to Jesse as they prepare to start making meth again, it is intercut with scenes of the aftermath of an apartment explosion, and a bald man walking away with a large sack. And towards the end...Walt: (to Jesse) No matter what happens... no more bloodshed.(cut back to the aftermath and the man walking away)Walt: (voiceover) No violence.(music builds up to a crescendo as we cut to the man's face... and it's Walt)
- Foreshadowing: Walt talks about fulminated mercury in his chemistry class ¿Or about his own life?
- High-Five Left Hanging: Skinny Pete clearly overstated how "tight" things were between him and Tuco, as his offer of a fist bump over the drug lord's desk is met with disdain.
- Hired to Hunt Yourself: Hank consults Walt on who might have stolen the equipment from his chemistry lab. It was Walt.
- How We Got Here: The teaser, dramatically juxtaposing Walt's declaration that there will be no more violence or bloodshed in their business over a scene of chaos and destruction that Walt seems to have caused.
- Important Haircut: Walt shaving his head marks the point at which "Heisenberg" is born.
- Improvised Weapon: Tuco using a sack of money to beat Jesse senseless.
- Incoming Ham: Tuco at first comes off as cold and intimidating, but once he takes a hit from the meth Jesse gives him, his true character in all of its loud, unpredictable, and insane glory breaks out.
- Internal Reveal:
- Walt finds out from Hank that Krazy-8 was the DEA's snitch who busted Emilio's operation, something the audience had already learned in a previous episode.
- Jesse finds out about Walt's lung cancer, and about Walt getting involved in the meth trade to get his family a nest egg.
- Kick the Dog: Poor Hugo. The guy is just the school janitor, is well-liked among students and faculty, and was very kind to Walt as he was dealing with his chemo-caused nausea. Unfortunately, after the theft of the lab equipment, the police determine him as the guilty party due to mild marijuana possession and some past misdemeanors and arrest him. He's found innocent for the crime, but still loses his job.
- Nice Guy: Hugo the Janitor who cleans up Walt's vomit in the bathroom, saying, "He's got kids to teach".
- Nice to the Waiter: Walt for his part is grateful for Hugo's kindness and is upset by Hugo's getting arrested and fired because of him (though obviously not enough to come clean himself).
- No-Holds-Barred Beatdown: Tuco delivers one to Jesse with a sackful of money, no less.
- Ominous Hair Loss: Walter begins losing clumps of hair as a result of the chemo. Though Jesse offers some helpful advice to avoid hair loss, he ultimately shaves his head completely bald.
- Pretty Fly for a White Guy: Some of the people Jesse deals to near the beginning of the episode is this. Not surprising, as he is one himself.
- Profiling: Surely Hugo's ethnicity had nothing to do with the cops trying to pin the drug operation on him.
- Science Hero: Or Anti-Hero, as Walt continues to use chemistry to kick ass.
- Stock Scream: When Tuco's office was blown up, one of the foley guys thought it would be a fun joke to sneak in Howard Dean's infamous scream.
- Stuff Blowing Up: Walt using a piece of fulminated mercury to destroy Tuco's hideout.
- Title Drop: Close. After Walt out-bluffs Hank in poker, Marie comments all Walt had was a "handful of nothin'".
- Villain Respect: Despite Walt threatening him, Tuco genuinely appreciates Walt's ironclad balls.
- Wham Episode: Walt shaves his head, takes the name of Heisenberg and intimidates Tuco into paying him for his meth by blowing apart his office with fulminated mercury.
- Wham Line: "This... is not meth." Said by Walt just before he drops a fulminated mercury bomb.