Walt and Jesse decide to start their own little empire with the help of Jesse's friends: Skinny Pete, Combo, and Badger. Meanwhile, Hank tries to pull himself together after his encounter with Tuco.
After Skinny Pete gets ripped off, Walt makes Jesse go get the money. Meanwhile, Walt's cover story on how Elliott and Gretchen are paying for his medical treatment is on the verge of collapsing.
Jesse's reputation as a drug lord leads Walt to push for expansion of the operation. Hank's foray into the DEA's El Paso office is not all he hoped it to be.
Walt and Skyler have a baby girl. Now that Jesse is hooked on heroin, Walt refuses to give him his money until he gets clean. Meanwhile, as an excuse for his money, Walt decides to donate the money to himself through his son's new website.