After retrieving Anthony's head from the basement, the nameless woman we've seen skulking around takes him to a lab where she melts him into nutrient sludge. It's unclear who this woman is exactly, but she appears to be the most knowledgeable about whatever is happening inside Fort Jerome. Her life's work has been dedicated to controlling this thing lest it destroy the world.
Goosebumps: The Vanishing then morphs into a found-footage horror movie as the teens bring Jen's tape to the nursing home to borrow Grandma Brewer's VHS player. A cool tidbit: This episode was directed by The Blair Witch Project co-writer and co-director Eduardo Sánchez.
The teens watch the footage on Jen's tape and we finally get to see what happened on that fateful night in 1994. We learn that Matty and his friends, Nicole and Sameer, intended to spend the night in Fort Jerome, a.k.a. "Camp Nightmare," as part of an epic senior dare. Matty claims the local legend is that the government uses it as a medical testing facility that turns people into monsters.
At the time of the taping, Matty and Jen were in a toxic, on-again-off-again relationship, and it quickly becomes apparent why Jen kept the tape hidden all of these years. She becomes jealous when Matty hits it off with new girl Hannah (more on her soon), and tells the camera that she hopes Matty and all of his friends die down there.
The remainder of that night plays out similar to what we saw in the season premiere, with Matty and his friends accidentally triggering the secret underground chamber, spores emerging, and the teens vanishing. Except, this time we also see that Hannah was down there with them. She finds Matty and the others stuck inside creepy pods composed of oozing black sludge. A terrified Hannah picks up the camera and tries to escape, but she drops it and gets yanked into the darkness by an unseen being.
At the end of the tape, we see that nameless woman again, this time wearing a hazmat suit. She arrives to clean up the mess, closing off the underground chamber again. But then Jen and Anthony arrive and she's forced to hide, unaware of the camera.
Back in the present, Cece, CJ, Trey, Frankie, and Alex are horrified by what they've just seen. Watching the footage jogs some memories and Trey recalls being trapped in one of those pods himself. Plus, he and CJ recognize the woman as the lady masquerading as his doctor at the hospital. The group also realizes that Devin said he was hanging out with a girl named Hannah, the very same one from the film. Devin texts that he's at Camp Nightmare and the group rushes off to save him.
"Hannah" is some kind of entity created by the spores, similar to whatever Anthony became. She attempts to kill Devin by persuading him to jump off of a cliff, but luckily Cece and the others arrive in time to prevent him from doing so. Cece tells Devin that there's no one there. Only he can see Hannah and that's because the "process" started in him back in the first episode. However, it was interrupted seemingly when Devin cut off the vines in the sewer.
On the way back to the Brewer home to search for Anthony, we get a little more development on some of the core relationships between the main group. Devin and Trey appear to becoming friends, although Trey still isn't thrilled about whatever is happening between Devin and Frankie. Alex and Cece finally take the next step in their relationship, sharing a kiss.
We circle back to the mysterious woman and Anthony, who has now disentegrated completely into sludge and leaked from the lab table into an underground room. He's trapped in his own pod now, just like the other teens were in the footage.
All episodes of Goosebump: The Vanishing are now streaming on Disney+.