Jeremy learned more about the history of Mystic Falls, thanks to a new friend. He met a girl named Anna at the library. Turns out, her grandfather also kept a journal and Anna is convinced Mystic Falls has been (and still is?) the home to many vampires. She brought out news articles about supposed animals attacks over the year as proof.
Viewers met Alaric's wife... sort of. We got a flashback of him kissing her goodbye and also listened to his first-ever voiceover. He said Logan - who he killed - was the first vampire he ever met, but that eh can sense evil is lurking in the town. At the end of the episode, he appears to truly find who/what he came there for:
Via another quick flashback, it appears that Damon - who just sat down at the bar next to him - killed Alaric's wife.
Elsewhere in town, Stefan bonded with Bonnie and her grandmother. He came to Bonnie's rescue after she was sucked down into the ground and ended up outside the tomb where Katherine is buried. Stefan learned of her location through her grandmother and carried her to safety. This endeared him to Sheila, Bonnie's grams. Stefan said he remembers her from the civil rights movement in town and the two come to an understanding: they're both on the same side, they can help each other in the future, but Sheila will always put her family first.
As for the main storyline: Damon pulled Elena out of her totaled car and scared away the unknown creature that was coming her way when the previous episode concluded. He then essentially kidnapped Elena and took her down to Georgia.
Once there, Elena was introduced to Bree at a bar. She's an old flame of Damon's and also a witch that knows his secret. As Elena begins to see a somewhat softer side to Stefan's brother - and as she ignores Stefan's calls because she's still mad over the lie about Katherine - Bree places a call. Soon enough, a dude named Lee comes swooping in and goes after Damon. Lee has been turned a vampire by his ex-girlfriend: Lexie.
He wants revenge on Damon for killing her and is about to end his life when Elena pleads with him to stop. Lee gives in, seemingly in honor of Lexie, but also because Elena made her case well. Why would she actually save Damon? Maybe he's not so bad, after all, she's starting to realize. He is being honest with her about life as a vampire and he seems to genuinely care about her feelings. Of course, he can be a sensitive guy himself: Damon goes back into the bar and kills Bree for betraying him.
Before he does, she admits that there is a way into Katherine's tomb: Damon needs to get his hands on Emily's spell book and see how to reverse the curse.
When Elena gets home, Stefan finally gets a chance to speak to her. He says he has no idea why she resembles Katherine and he drops a bomb on her: he didn't go after her due to her connection to Katherine. Instead, he explains that he used to come back every now and then to visit his uncle and the town. One night, on May 23, 2009, he overheard a car crash off a bridge. He rushed to the scene, but could only save one person from it: Elena. He was aghast when he saw how much she looked like Katherine.
He conducted a bit of research to determine why and came up with one important fact: Elena was adopted. Stefan says he loves Elena for who she is, because she's so different than Katherine. The two kiss, but Elena is clearly, understandably taken aback by this news about her family.
Source: TV Fanatic