Han casts his spell. His goal is to make Storybrooke his slaves. While Regina doesn't think that the spell can be broken, Gold knows of a way: she must destroy the scroll. Han drops the potion into the well and tells Felix that he's counting on friendship to make the curse work. He grabs Felix's heart, killing him, and crushes it over the well.
Meanwhile, Gold needs the Black Fairy's wand, and the misfits divide to find it. Some will go "pay their respects" to Blue, while the others will be at Gold's shop. As the mist starts to pour out of the well, we see Emma's car drive into the forest for the opening credits.
In Gold's shop, Emma learns from MM about the mobile that would have hung over her crib. Emma likes the unicorns and they talk about why they gave their respective children up. Panry has entered and Gold says the Black Wand should be able to help them.
At the church, Neil, Tink, Charming and Hook ask for the wand as Pan's shadow appears. The misfits hide as the shadow swoops. Hook decides that he will be the one to play hero and moves out. As the shadow knocks him down, Neil grabs him. Tink must save the day. She opens the fairy dust and breaths, gaining courage and magic. She opens the shell, lights the candle and flies up to get the shadow. Capturing it, she lands and throws it into the fire. With that, Blue comes back to life and gives Tink her wings again and Neil the wand.
Gold has, meanwhile, put Pan's bracelet on Panry. Panry is ready to become himself. He lies down, Gold cast the spell and the spirit leaves. Emma leads the gang to find Henry, but Rumple stays behind to watch the sleeping Pan. He has business with dear old dad. So as Henry reunites with his family at the library, Pan returns to himself in the shop and questions why he isn't dead. Gold tells him that he will be. The bracelet, though, won't work on Pan, who slaps it on Gold and throws him against the wall. Pan gloats about his plan, that he is not going to turn the family into slaves but kill them, and he leaves the store. Rumple tries to get the bracelet off but comes up with a plan.
As Pan casts a spell over the crowd in preparation to their destruction, Gold arrives. He tells Neil that he wants him to have a chance at happiness and, to Belle, that she made him stronger by her love. He has called his shadow with the dagger and plunges it into Pan's back. Pan transforms to dad and offers a happy ending if Gold will remove the dagger. Gold reminds his dad that he's a villain and doesn't get a happy ending. They both dissolve in gold light and the misfits mourn.
Regina grabs the spell and stands. She confirms Pan's death and Leroy arrives with news of the curse. Regina tells Emma that the price will be their memories of Storybrooke and the town itself. She tells Emma to take Henry and run. If they are in the town when the curse breaks, all but Henry will return to the Enchanted Forest. Refusing at first, Emma agrees with tears as we see a black SUV head out of town.
Goodbyes are said at the town line. While Henry blames himself, Regina tells him that she's the villain. Emma has a sad goodbye with Snow and Charming, while Neil tells her it isn't over. Hook stops her and promises her he will not forget her. Regina calls Emma aside and tells her that when the curse is broken, nothing of Storybrooke will remain. She promises Emma good memories with her son. As Henry and Emma leave, the spell comes upon them with Regina watching the car fade in the distance. Immediately, we are given a different view of Henry's birth and Emma's decision to keep the baby.
One Year Later
In New York, Emma and Henry awake in their apartment to a happy life. They are eating breakfast when a knock sounds on the door. Emma opens the door to find Hook standing outside. She doesn't recognize him, but he brings news that her family is in trouble. Hoping to make her remember with a kiss, he gets injured instead. He tells her she has to remember.
In the preview for the next episode, we see that life has changed in the Enchanted Forest, but Hook has retained his memory of Emma. He's in New York to warn her of her family's danger. And we have the new villain -- the Wicked Witch of the West, folks. To those who guessed her, congratulations.
Once Upon a Time returns March 9 at 8pm on ABC.