The gang then goes out to the scene of the train-crash, this time using it as background for their filming. During the filming, Joe notices that the train features Air Force insignia.
Later at a restaurant, he peruses over the map that Dr Woodward had in his possession, noting a red line drawn in, snaking across the country. The group is still unsure why Woodward did what he did, but some are of the persuasion it was a failed suicide attempt.
Meanwhile, Jackson Lamb has come to the train-wreck site looking for answers. However, none of the clean-up crew or their superior, General Nelec (Noah Emmerich), is not willing to tell him anything, other than the cargo and clean-up is not hazardous. Jackson notes the government men picking up strange little white cubes, and making plaster casts of some tire tracks in the ground.
The next day, the town devolves into a state of crisis, as Sheriff Pruitt (Brett Rice) goes missing. His wrecked vehicle is found near a gas station, with its windows smashed in and the attendant also missing.
Jackson also receives reports of missing people, dogs and electrical equipment. While some report missing household items like microwaves, the oddest thing are missing electrical lines and engines straight out of vehicles.
Jackson soon grows concerned when the Military begins to roll into Lillian. Still not receiving answers as to their presence in the town, he receives word from one of the townspeople about a radio frequency that seems to be picking up Military transmissions.
Jackson has the other officers tune their radios into the frequency, and soon hears word of something codenamed "Operation: Walking Distance." Shortly after hearing the transmission, Jackson encounters Alice's father Louis, who tells Jackson to keep Joe away from Alice. Upset at hearing this, Jackson tracks down Joe, and takes back his movie camera as well.
Jackson finds the Military moving stuff out of Dr Woodward's home. Finding General Nelec at the site, Jackson again demands answers. When he doesn't get any, he mentions 'Operation: Walking Distance.' This causes Nelec to agree to meet with Jackson later on that evening at a nearby airfield.
Taking him home, Jackson demands that Joe keep away from the Dainards, but Joe claims that Alice isn't like her father, and that she's nice. The two once again reach a wordless impasse, before Jackson storms out of the house. He then goes to the airfield to meet with General Nelec, only to be placed under arrest and locked away.
Joe heads over to the cemetery after this, where he sits at the headstone of his Mother's grave. While there, he hears some loud scraping and noises coming from a garage near the tombstones. Returning to his room later on, he is surprised when Alice appears. As they sit and talk, Alice asks Joe about the locket she's seen him carrying around.
He claims it belonged to his Mother, and they retrieved it after her accident. Alice also finds Joe has a projector set up, and sees he has been watching home movies of his Mom from when he was younger. Alice tells Joe that she is sorry for the pain her Dad caused, and feels he really is not all bad.
Joe tells that he also does not feel any ill will towards her Dad, when their attention is drawn to the strange white cube Joe picked up at the crash site. As they watch, it begins to vibrate, before shooting through a nearby wall, leaving a hole behind.
Alice then heads home, only to find her father drunk and smoking in their living room. Disgusted by her father's behavior, she rushes out and gets on her bike. Louis drunkenly follows in his car, but ends up crashing it.
As Alice is unsure what to do, a she turns to see a large creature that causes her to scream. Louis attempts to get free of his wrecked car, but finds Alice and the creature gone.
The next day, Joe and Charles go to pick up the developed Super 8 film, but Charles is rather upset and cryptic towards Joe. When they finally get to Joe's place and watch the film, Charles explains that he is upset that Joe and Alice seem to be getting along and liking each other.