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After the reception-turned-riot, Hank drops Lillian off at the train station and heads over to see Dagny.
He apologizes for showing up with Lillian, but Dagny says no worries, she knew what she was getting into when they started the affair.
He asks again who her past lover was, and Dagny asks him why he needs to know so badly. Hank has no answer.
She tells him to stop feeling unnecessary guilt.
They talk about Francisco, and Dagny warns Hank to watch his back around him.
Hank confesses that he may have been lying to himself when he made his "Dagny is Impure" speech back at Ellis Wyatt's house. Dagny says she already knew that.
Scene cut! Hank goes back to the Wayne-Falkland Hotel in the morning to find Lillian there. Yipes.
She tells him she knows he's having an affair, and he says so what.
He won't tell her who with, and Lillian guesses it's a showgirl.
Lillian lays into him. Hank tells her she can condemn him all she wants but he's not going to stop his affair.
She then refuses to give him a divorce and rants about how horrible he is and she wins because she has dirt on him now.
Hanks tells her to leave and thinks that she's lucky he didn't kill her.
Scene cut. Dr. Ferris has come to visit Hank at his office.
Ferris has come to blackmail Hank. He gets right to the point: he knows about his illegal dealings with Ken Danagger. He tells Hank that he now has to hand over lots of Rearden Metal to the State Science Institute, which he had refused to do before.
Ferris then tries to get Hank to come over to the dark side and join him in his corrupt Washington power games.
He lets Hank in on a secret: the government made the ridiculous laws so that people will have to break them. By turning everyone into fearful criminals, the government can have more power and can rule people by beating them down.
Hank tells Ferris he won't cooperate and he'll have to take him to court. Then he has Miss Ives throw Ferris out.
Scene cut. Eddie is back! He's speaking to his Mystery Worker friend in the cafeteria.
Eddie gives us the dirt on Ken and Hank's upcoming trial. They've both been indicted. Dagny is worried about Ken because he seems beaten down and ready to quit.
Dagny thinks a "destroyer" is at work in the world, getting to talented businesspeople and making them give up. She hates the destroyer and wants to find him.
Eddie is very worried and says Dagny is exhausted and works too hard.
He talks about how he's found her asleep in her office, and Mystery Worker apparently asks what she looks like when she sleeps (creepy!). Eddie tells him (also creepy!) and admits that it's weird of him. Apparently Dagny looks like an innocent child when she's asleep.
Scene cut! Dagny is at Ken Danagger's office waiting to meet with him. He is running very late for their appointment, which baffles his secretary. Ken is usually super punctual and would never make Dagny wait so rudely. Ken is currently meeting with some mystery man and has been for hours.
Dagny waits for hours and gets increasingly nervous.
Finally, Dagny and the secretary burst in on Ken and see the shadow of a man leaving.
Ken looks totally different now – much younger and happier.
Dagny is dismayed to see that the destroyer got to him first, and that Ken will now be quitting and disappearing.
He tells Dagny that it's a good thing and she'll understand soon.
He gives her a message for Hank and says Hank is his best friend.
Dagny begs Ken to stay and explain things to her, but he refuses and says that she'll be joining him someday in the near future.
Scene cut. Hank is in his office thinking about Ken Danagger. He is sad about how they all waste so much time working hard and putting up with people they hate rather than spending their downtime with potential friends. He regrets missing out on time with Ken.
Francisco then shows up. He's everywhere!
Hank and Francisco talk about Ken, and Francisco confronts Hank about his split personality. He asks why Hank uses one moral code in business and another in his personal life.
Next Francisco gives us the meaning behind the book's title. He says that Hank and other successful businesspeople support the world, just like Atlas did in Greek mythology. But Atlas/Hank is suffering, so why not shrug off the world.
Then alarms go off – there is trouble down in the mill. Hank and Francisco rush down to get things under control. They work together well as a team putting out a fire.
Francisco nearly falls and Hank yanks him back to safety. Hank feels paternal towards Francisco.
When they finally return to Hank's office, Francisco refuses to talk to Hank anymore, saying that he's learned that Hank isn't quite ready to hear the rest yet.