The group reaches the lumber mill. Everyone is ready to go inside, but York insists that he go in alone because he hasn’t cleared George or Emily as suspects. Although insulted, they stay behind while York begins his investigation. He immediately realizes that the mill is populated by shadows but pushes on ahead anyway.
After clearing out some enemies and glimpsing the man in the raincoat, he comes across the original murder scene. An altar is surrounded by red curtains and candles, and there is a massive amount of blood everywhere. A mannequin has been laid on the table like a sacrificial lamb.
Inside a nearby room, York comes across a ringing phone. An ominous voice at the other end asks, “Where’re you hiding?” A symbol suddenly appears on the window. He grabs a nearby key to the engineering section of the mill and fights his way through another wave of shadows. York continues through the mill until he hears a baby’s cries, which lead him to a spare gear box. He uses this box to power up the elevator and picks up another clue.
On the next floor, York comes across a strange door covered with hands in the shape of a tree. He finds an actual tree with hands growing on it down a corridor and takes one of them, fitting it into the door as a handle. As he continues forward, he comes to a set of mirrors and nearly jumps when he looks into them. The strange man in the red raincoat is dragging an axe mere feet behind him.
York gives chase, only to be ambushed by the man further into the lumber mill. He gives up and heads to the circuit breaker to fix the power. Before he can leave the power room, however, the phone rings and the same voice says, “I see you.” York quickly dives into a nearby cabinet as the man in the coat breaks down the door with his axe. The man looks for the agent, taunting him as he checks every possible hiding place. York holds his breath and manages to elude the killer, who screams and disappears down a hallway.
He doesn’t stay in the shadows for very long though. As soon as York leaves, the man gives chase. The two run all through the lumber mill until York gives him the slip by the elevator. The chase continues after the elevator stops and York steps off. Once again, the FBI agent escapes, this time by shooting the elevator controls and sending the killer back upstairs. York returns to the altar, profiles the scene, and leaves the mill.
Outside, York shares his findings with Emily and George. Emily comments on the raincoat and tells him that most people simply avoid the rain in town, so a coat is unnecessary. George elaborates and tells them the story of the Raincoat Killer. He then explains that even though few people believe it, shops and schools still close up when it rains.
Out of the blue, York asks the two of them to show him their backs, which would clear them as suspects as he’s looking for someone with an upside down peace sign on their back. (He also asks them to ignore Zach.) The three of them argue about its inappropriate nature, but Emily finally agrees to do it. George then reluctantly gives in, showcasing a back that’s riddled with scars. He brushes off their concerns.
After clearing the two of them as suspects, York asks if George can gather the townsfolk all in one place. George agrees to call them to the community center the following day.