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As the standoff between Scully and Skinner continues (from 3X01), Mulder bursts through the front door of his apartment and orders Skinner to drop his weapon. Skinner complies, then produces the computer disk containing the Defense Department's top secret files on extraterrestrial life. He realizes the disk is the only leverage the trio has in bringing Mr. Mulder's killers to justice, and insists on keeping it himself. Mulder and Scully examine an old group photograph of Mr. Mulder with his government colleagues. With the Lone Gunmen's help, Mulder and Scully identify a man named Victor Klemper from the group. Klemper is a Nazi War criminal and a participant in Operation Paper Clip, a U.S. government operation that provided safe haven for war criminals in exchange for their scientific knowledge. Before the agents interview Klemper, Scully learns that her sister Melissa is in critical condition at a nearby hospital. Fearing an ambush by assassins, Scully joins Mulder in his quest to locate Klemper.
The agents elicit little information from the elderly Klemper, except that the group photo was taken at the Strughold Mining Company in West Virginia, and his mention of Napier's Constant, the base of all natural logarithms.
When the agents visit the ramshackle mine, they discover heavy metal doors built into the rocky walls of the mountainside. The agents gain access by entering Napier's Constant into an electronic keypad. Inside, they find a seemingly endless row of filing cabinets containing files and tissue samples on hundreds of U.S. citizens. Their search is interrupted when a U.F.O. drops from the sky. Simultaneously, a government hit squad surrounds the building. Mulder comes under fire and runs for cover. He and Scully find an escape route and make their way to safety.
Skinner pays a visit to the hospital where Melissa is being monitored. There he meets Mrs. Scully, and Albert Hosteen, who prays for Melissa's recovery. Skinner is alerted to a shadowy figure monitoring the room. In a darkened stairwell, he is attacked by Krycek and his accomplice. They overpower Skinner and steal the computer disk.
Mulder and Scully make a second trip to question Klemper, but when they arrive, they are informed by the Well-Manicured Man that Klemper is dead. Mulder recognizes him as one of the people in his father's group photograph. The Well-Manicured Man recounts how, in 1947, a spacecraft was reportedly recovered in New Mexico. This event coincided with the formation of Operation Paper Clip. Mulder suspects that Klemper was experimenting with the creation of a super race-a hybridization of humans and aliens. The files stored in the mountain, Mulder realizes, are vaccination records on hundreds of millions of Americans who received smallpox vaccinations-a DNA database of virtually everyone born since the 1950s.
Skinner threatens to expose the Cigarette-Smoking Man if any harm should befall Mulder or Scully. He reveals that Albert Hosteen-who read the computer disks-spread the contents amongst his Navajo people in the ancient oral tradition, chapter and verse, file for file.
Later, Mulder visits Scully at the hospital, and learns that Melissa passed away during surgery.