- A sinister black van rolls slowly down the street intercepting people's conversations. It picks up Elliott and Michael's conversation in their garage. Harvey's there, too, but he doesn't say much.
- Elliott and Michael collect parts for E.T. to build a communication device.
- Michael tells Elliott that E.T. doesn't look too good, and Elliott says, "We're fine." Michael's concerned by all of this "we" stuff.
- Michael and Elliott find one of their dad's old shirts, smell it, and reminisce about the things they used to do with him while the man in the van listens like a creep.
- It's bedtime for Gertie. Mom reads Peter Pan to her—the part about the importance of believing in fairies. E.T. listens from the giant closet.
- Elliott brings E.T. a box of materials and cuts his finger on a saw blade. E.T.'s finger lights up, and he heals Elliott with his touch. He's got the touch! He's got the power!
- Elliott wraps E.T. in a coat and a scarf and they both listen to the end of Peter Pan. Elliot puts his arm around E.T. That unsettling black van is still idling out front.
- Cut to Michael and Elliott watching E.T. build his machine. E.T.'s breathing sounds pretty horrible. Michael asks Elliott what E.T.'s feeling, and Elliott says, "He's feeling everything."
- E.T. levitates various items. Take that, MacGyver.
- The geraniums are dying. Yikes!