First, Jeremy told Stefan, Damon and Elena that Alaric had his ancestor's journal. This led to a confrontation between Stefan and Alaric, as the former went to retrieve the journal and the latter responded... by trying to shoot him with a wooden stake! But Stefan caught it and learned all about Alaric:
He witnessed Damon kill his wife, but her body was never discovered. He's in town to learn more about what happened. Stefan says he can protect Alaric, but he needs that journal. When they turn to look for it, though, the journal is gone. (More on that, and who took it, below). Fortunately, Alaric made photocopies of it and hands them over.
As Elena and Stefan looks over this copied journal, they realize that the Emily's spellbook - the grimoire - is buried with Stefan's father. They go to dig it up.
Meanwhile, Damon has chatted with Jeremy and found out he also told Anna about the journal. When Damon takes Jeremy to meet Anna at the Grill, and watches from afar, he recognizes her: she's the daughter of a woman (Pearl) he knew in 1864! Pearl was a vampire and was Katherine's friend. Damon follows Anna back to her hotel room and confronts her. She's been here for awhile, it turns out, and likes to have "others do her dirty work." She turned Logan, and viewers also find out that she turned Ben fairly recently. She shows Damon the journal she stole from Alaric because they both wish to open that tomb.
Anna, we presume, in order to get her mother out. But Damon glances through it says: I work alone. He saw the same information Stefan previously saw and heads off to his father's grave.
When he arrives, he sees that Stefan and Elena were plannong on digging it up by themselves and screwing him over. He grabs Elena and threatens to kill her if Stefan doesn't hand over the book. Stefan complies, Elena is freed and Damon has the grimoire... but he almost looks ashamed at how he got it.
This feels like a good time to flash back to 1864. We learned...
- Damon ran away from the Confederate Army. His dad was disappointed in him, but confided in both he and Stefan that the town was getting together to round up the vampires and burn them in a church.
Damon made Stefan promise he wouldn't tell his father about Katherine, who both brothers seemed to know was a vampire and seemed to be sleeping with. Stefan agreed, but later asked his dad general questions about whether or not all vampires were evil.
- During this time, we learned that Pearl and Jonathan Gilbert had feelings for one another and we saw Anna back in the day. It's unclear if she was a vampire yet. It doesn't seem that way.
- We also learned that Emily's spells made it possible for Katherine and Emily to walk in the sunlight.
- Late in the episode, Katherine is hooking up with Stefan and goes to bite him... but his father secretly slipped him vervaine and Katherine is captured. Damon blames Stefan for the incident because he had put his faith in his brother. Pearl is also captured, by Jonathan himself. Anna witnesses this, but is told by Emily that she has a plan to proect them.
Back on the present day...
Ben is on a date with Bonnie, who kisses him. But her witch sense goes off and she knows he's a vampire. She tried to quietly leave, but Ben grabs her.
We close the episode with Damon in possession of the grimoire. Elena and Stefan are at the Gilberts, when the latter goes downstairs to get aspirin and learns that someone named Anna is there with Jeremy, just in the bathroom. Stefan makes the connection to the Anna he remembers from 1864 and runs upstairs to check on Elena. The window is open. She's gone.
Source: TV Fanatic