The episode opens with the final scene from the previous where Keiichi stares at the old magazine article describing the death of the dam project manager. Footsteps approach from behind to reveal Rena holding a large axe. The scene dramatically focuses on the blade as Keiichi panics and screams, then falls, causing Rena to become concerned. She rushed to help him. She apologetically explains that he suggested that they needed a tool like an axe. Since it is almost dark, Keiichi recommends that they return the following day. While disappointed, Rena cheerfully laughs when Keiichi insists they can free "Kenta-kun" the next day. The scene then focuses on the article.

In the classroom, Mion reminds Keiichi of the annual Watanagashi Festival of which Rika is a member of the executive committee. Mion then explains the details of the festival: the villagers take worn-out blankets and padded kimonos, thank them, then hold a memorial service down the stream. Keiichi deems this boring, which provokes the girls, including Rena and Satoko to join in a chiba presentation of the "Battle of Four Evils." With Keiichi, they will have five. As Satoko and Rika explain, they will do club activities as they visit the stalls.

Jirō photographs a bird as it flies off a branch. Keiichi, Rena, and Mion greet him. Jirō embarrasses them by joking that he is jealous of Keiichi for being surrounded by girls. After he leaves, Keiichi asks if they know him. They explain that he comes to Hinamizawa to take pictures of the scenery and birds.

Keiichi narrates over a scene of the festival that, a few days later, Watanagashi arrived. Rika appears dressed as a miko (shrine maiden), or kannushi, (priestess). As Rena enters her "Cute Mode," Mion orders them all to begin. Jirō notices them and starts taking pictures as they enter a montage of challenges. When Rena fails to win a stuffed bear for Rika at the shooting gallery, Keiichi gallantly wins it for her. The ritual begins in the evening with a man in a demon mask beating a drum while Rika wields a ceremonial rake, which she uses on a stack of cotton from the bedding. Afterwards, the villagers float balls of the cotton down the river. Rena explains to Keiichi that the cotton absorbs "all the bad stuff from your body."

Walking from the river, Keiichi suddenly notices that Rena is no longer with him. Looking around, he sees Jirō with a woman with long blond hair. She greets him by name to his surprise since he does not know her. She asks him if he has become comfortable with Hinamizawa. Keiichi notices there are things he does not know and specifically mentions the dam construction. Jirō reviews the events for him. Keiichi asks specifically if a murder and dismemberment occurred. Jirō affirms that one happened four years previously around the time of the Watanagashi festival. Takano adds that the elders claimed it was a result of Oyashiro-sama's "curse." Jirō explains that villagers felt that Hinamizawa's guardian god punished the dam construction which would have submerged the village. Takano adds that every year "it" happens again, which Jirō and Takano then explain, with examples, is the death of someone, often with a disappearance of someone else, on the day of Watanagashi.

The next day, Keiichi muses on his conversation the night before with Jirō and Takano. He notes, at the time, he did not believe it had anything to do with him. The scene shifts to Mion triumphantly winning a murder mystery card game over the wails of Keiichi and Satoko. Keiichi demands another game while excusing himself to use the bathroom first. Mion makes a crude joke about it which upsets Satoko. In reality, Keiichi plans to use the time to develop a strategy. Before he enters the bathroom, Chie Rumiko stops him to tell him he has a "visitor" at the entrance. He meets a police detective, Ōishi, who suggests they talk in his airconditioned car. Ōishi asks him about Jirō then Takano. When Keiichi responds that he talked to both Jirō and the woman during the Watanagashi festival the night before, Ōishi explains that Tomitake died.

Ōishi explains that he committed suicide by clawing out his own throat. Though the police suspect drugs, none have been found. He had multiple external wounds which suggest a number of people assaulted him., while Takano has gone missing and is a suspect. Both realize that Jirō must have died right after Keiichi talked to him. Ōishi mentions Oyashiro-sama's curse. When Keiichi protests, Ōishi compliments him that as an outsider he does not believe in such things. He gives Keiichi his card and informs him that their conversation is confidential, "especially from Sonozaki and her friends." When Keiichi asks why, Ōishi explains that he does not know how the village is involved, and he suggests that Keiichi think they should not involve the "curse-believing" villagers.

The following day, as it rains outside, Keiichi sits in class with his head on his desk lamenting he could not sleep during the night. He can hear Mion and Rena whispering: "I heard she disappeared on the festival night." He hears that they are not sure if it is the "curse" or the "spiriting away by a demon." Rena wonders if she will be "next." Mion assures her that she "came back," only for Rena to whisper back that "Toshi-kun didn't, right?" As Mion tries to comfort her, it is revealed that outside the window hangs a charm against bad weather.

During the club meeting, Mion suddenly realizes she promised to help her uncle. She leaves and Satoko declares the activities canceled and starts to leave with Rika. This leaves Keiichi alone with Rena. He observes the cards for the murder game and notes one gives a player's name: "Satoshi" (悟史). He asks Rena if any students have transferred from Hinamizawa. When she confirms some have, Keiichi asks if that includes "Satoshi," which causes Rena to stop what she was doing. Without looking at him, she responds in a flat voice that she does not know much other than he transferred out around the same time she returned.

As they walk home together, Keiichi asks if she and the others have been lying to him. When she meekly claims they have not, Keiichi responds, "that's a lie" (嘘だよ・usodayo). Rena flatly reminds him that he has been lying to them. When he denies it, she reminds him that he lied about going to the teacher's office when he actually talked to a man she does not know. She icily asks him who the man was. When he states it was a person he does not know, she rhetorically asks him why a stranger would need to speak to him. When she asks him what they talked about, Keiichi tries to dismiss the question by claiming it was nothing to do with her. Rena screams "LIE!" (嘘だ). She then gently reminds him that just as he has secrets and things to hide, so do they. She then smiles, giggles, and suggest they continue walking home.

Lying in his room, his mother tells him that the "bookstore" is on the phone for him. He discovers that it is actually Ōishi. Keiichi asks him what "spirited away by the demon" means. Ōishi explains that Hinamizawa was feared long ago as the "village of the demon" where the demons kidnap and eat people. Keiichi informs him that Rena and Mion talked about it. In reviewing the murders, Ōishi asks him if those who were not caught could have been spirited away by demons. With regards to the housewife, Ōishi admits that a drug addict was arrested, but after the arrest, the police discovered that one of her children disappeared, while the suspect died in his cell. Ōishi reveals that the missing child was a year older than Keiichi and is named "Satoshi." In a flashback, Keiichi recalls that he was assigned to sit in the seat "of a student who transferred." His father interrupts him by kicking on the door of his room. After hanging up, Keiichi opens the door irritated to find his father holding a tray with two cups of tea. His father playfully tells him not to "hide things," and since Rena was with Keiichi, he figured he would bring them both tea. Keiichi is stunned; his father thinks he is just shy about having a girl over. His father explains she walked up the stairs and he told her where his room is.

Keiichi slams his door shut while his father protests he should not be embarrassed. Keiichi thinks and imagines that Rena must have been at the door of his room when he talked to Ōishi. Outside his home, Rena stands watching sadly.