Mulder dreams about a young couple teaching their son to walk on a beach. In reality, Mulder is still in the hospital, lying in a coma. His mother tries to speak to him and receives no response. Mrs. Mulder doesn't hear her fully-alert son calling out to her in his head. But the Cigarette-Smoking Man (CSM) knows Mulder can read his thoughts. He injects Mulder's head with a serum that allows Mulder to move and speak. CSM offers his hand. Mulder again envisions the toddler on the beach as the words of CSM lull him: "Take my hand because I am your father."

Scully is working round-the-clock to find the cause of Mulder's illness, when Kritschgau sneaks into the office. He explains that exposure to the spacecraft's energy has activated the alien virus injected into Mulder two years ago. Kritschgau demands Scully's research, but they are interrupted by a phone call from Skinner: Mulder has disappeared from the hospital. She hurries to the hospital and learns that it was Mulder's mother who has checked him out. Skinner tells Scully that he must remove himself from the case and from knowledge of the agents' whereabouts. Skinner's position has been compromised. Mulder again sees the boy on the beach, and awakens to find himself in CSM's car. CSM tells him that doctors have worked on him, and the only way he can be saved from death is to disappear into a kind of witness protection program. CSM pulls up to a suburban street and points out Mulder's new life. CSM offers him the chance to return to his previous existence with the X-Files, but Mulder is curious about this new home. He is pleased to find a refrigerator stocked with his favorite sunflower seeds. As he pops one into his mouth, he is startled by the presence of an old ally -- Deep Throat (killed the first season in "The Erlenmeyer Flask"). Deep Throat boasts about his peaceful life in this neighborhood and encourages Mulder to join him. But Mulder is overwhelmed with guilt for his causing this man's supposed death. Deep Throat tells him not to feel responsible for his death or the deaths of Mulder's father, Scully's sister and Duane Barry. Deep Throat explains that they the two of them are merely puppets in a master plan. He coaxes Mulder to relax and enjoy his new life.

Scully finds the Navajo elder Albert Hosteen (last seen dying in "Biogenesis") in her apartment. Hosteen warns her that she must save Mulder for the sake of mankind. Scully returns to the hospital. She reviews a surveillance tape of Mulder's room where she can see through the mostly covered monitors that Mulder's mother is talking to someone with a cigarette. This convinces Scully that CSM is behind Mulder's disappearance. At the FBI, Scully receives an inter-office envelope containing a book on Native American practices. The symbols on the book's cover match the ones she had been studying on the spaceship in Africa. She reads a myth foretelling a mass extinction with a man who can save the world from this tragedy. She calls Skinner to question him as the source for this clue. Scully deduces that they took Mulder because they think his illness is protection against a coming plague. An apprehensive Skinner hangs up on her. Scully runs up to his office and sees Skinner doubled over in pain, while a bearded man escapes. Scully goes to Kritschgau and admonishes him for revealing the secrets about Mulder's illness. Kritschgau has hacked into her computer files and explains that her research will prove that Mulder has biologically transformed into an alien.

Mulder has another vision of the beach. The boy is sad that his sand sculpture has been washed away by the tide. Mulder comforts him and encourages the boy to build it again. Mulder is awakened by Diana Fowley who comes to his bed, convincing him of the joys of marriage. They make love. The next morning, Diana tries to persuade Mulder that he should become a father. She brings him to CSM's house nearby and points out CSM's daughter, Samantha Mulder. Suddenly we are in an operating theater. CSM tells Diana that men like Mulder have dreams of a simpler life. He says this about the real Mulder, who lies on a table with his head strapped in a surgical device. This is where Mulder really is. The illusion of domestic, suburban bliss is only in his mind.

At the FBI, Scully tries to appeal to Diana for help, causing Diana to question CSM's motivation for using Mulder in the experiments. Albert Hosteen reappears in Scully's apartment. He tells her to look inside her heart for Mulder. The two pray together.

Still in his dream, Mulder's life progresses with Diana. He physically ages as he goes through their wedding, her pregnancy and children, and then her death. Mulder slips back into his subconscious where the sand sculpture has become a spaceship. The boy starts to smash the sculpture, telling him that it is really Mulder's spaceship and he is the one destroying it. A now aged Mulder wakes up to CSM at his bedside. CSM tells him that he should let go. As Mulder closes his eyes, the world outside is in full apocalypse. Yet in real life, Mulder and CSM are side-by-side on a medical table for some kind of procedure transplanting Mulder's alien genetic material into CSM.

The bearded man from Skinner's office kills Kritschgau and torches all his research. Only now is his identity revealed: it's Alex Krycek. An envelope is slid under Scully's door with a key card that leads Scully to the surgical facility where Mulder is being held. In Mulder's dream he is ready to give up, but Scully forces him to persist with their mission. In reality, Scully does come to the surgery room to save Mulder. She wakes him up and he draws strength from her presence. She helps him escape.

Scully checks up on the still weakened Mulder is in his apartment. He wears bandages on his head from the operation. He informs her that Albert Hosteen has died in New Mexico. This upsets Scully. She doesn't believe that her experience was imagined. Then Scully breaks her bad news to Mulder: Diana was murdered because she helped save him. Mulder is emotional, and reveals his dreams about another life without the X-Files. He admits to Scully that she was the only one who told him the truth in his dreams and that "even when my world was falling apart, you were my constant, my touchstone." She tells her partner that she feels the same way, then leaves. One more time, Mulder dreams of the boy on the beach. This time they are rebuilding a huge sandcastle spaceship together.