With the tomb vampires set to descend on Mystic Falls during the Founder's Day celebration, John knocks out the sheriff and sets off the Gilbert device. Through a high-pitched sound, only heard by vampires, it will render these creatures immobile, so officers can swoop in and inject them with vervain.
This is what goes down, as the plan takes place during a fireworks display. Damon is verained and taken away, along with a few tomb vampires - and Mayor Lockwood, who falls to the ground after the device goes off. Tyler was also driving during this time, with Matt and Caroline in the backseat. He's affected by the device and crashes. Caroline is taken to the hospital with internal bleeding, while Tyler's eyes go all werewolf-like when paramedics check on him. Guess werewolves are also affected by this device, which explains the Mayor's situation:
He's in the basement with other vampires, including Damon. Before John sets the building on fire, he stakes Anna. She's dead. Damon witnesses this. He also watches as another vampire kills the mayor. How will he get out? By Stefan running to the building. He was dragged to safety by Alaric, but can't get in to the basement because of the fire. Fortunately, Bonnie arrives and uses her power to put it out. Stefan takes Damon to safety, while the other vampires perish.
But all is FAR from good. Jeremy is at home, depressed over Anna's death. Damon shows up and says he actually felt badly for Anna when she died, as his humanity is showing through. After turning down Damon's request to erase his memory, Jeremy asks him if it's easier to be a vampire because they feel nothing. Damon said it used be. Soon after he leaves, Jeremy drinks the blood Anna had given him - when she wanted him to turn - and takes a lot of pills. When the episode ends, we're left wondering if this worked.
MEANWHILE, Elena comforts Stefan about her feelings for him. She says she loves him. Cut to the Gilbert house, where Damon has just left and meets Elena outside. He thanks her for caring about him because, hey, that's the reason Bonnie (who we also see tell Stefan that she'll take Damon down if another drop of blood is spilled. She now knows her power and means BUSINESS!) helped save him: for Elena. Damon leans in to kiss Elena and she goes with it. Eeek!
Jenna catches them in the act and tells Elena to come inside. She does so. She walks into the kitchen and John is there. He tries to explain to her what happened between him and Isobel, because Elena knows he's her father (Stefan told her earlier). Elena listens, and then grabs a knife, chops off his ring/finger and thrusts it into his chest. IT's KATHERINE!!!
Cut back to the front door, where the real Elena walks into her house. She hears something in the kitchen and goes to check on the noise, as we fade to black...