Eddie is still using his asthma inhaler as a nervous tic: his memories are making him really anxious.
As we open, adult Eddie is driving his rented limo through the streets of Boston, effortlessly navigating.
That seems to be his Eddie superpower: he can navigate anywhere, directed by an inner compass.
He's heading back to Derry this time, which gives him the willies.
But he also remembers the good times: in many ways, he was saved by his friends.
Especially Bill, whom he idolized.
When the boys reconvene the next day at the site of the "baby dam" that Henry Bowers and his goons smashed to bits, it's clear that Bill is a bit off.
Probably because he saw George's photo album spurting blood the previous day.
But they start to relax a bit.
Ben is totally sure how to build a better dam. It's announced that Stan Uris and Richie Tozier will be joining them.
Bill starts to cheer up, and Eddie relaxes, the hypochondriac voice of his mother—"Don't get your feet wet! You'll get pneumonia and die!"—growing fainter as the morning wears on.
Aww, time for a cute-kids-being-cute-kids moment: Ben, Bill, and Eddie building the dam.
It's a beautiful day: slight breeze, no clouds in the sky, low 70s.
Everyone is in a great mood, and the dam is a complete and utter success.
Eddie has a feeling of excellent health (so: he's not anxious) and power.
Basically, it's the opposite of being around his mom.
The boys watch the dam, and the way it's changing the scenery of the creek.
They also chat a bit...about how Ben hid his bloody and ripped clothes from his mom, and how to shore up the dam.
Then Richie Tozier and Stan Uris show up.
The kids work all afternoon, and then stop at five o'clock to have a cigarette break.
Yeah. It was the 1950s.
To be fair, not all of them smoke—the cigs are provided by Richie, who really is a motor-mouth. He talks nonstop, making jokes and zingers and doing voices that all…pretty much sound like Richie.
Stan, by comparison, is quiet.
It's a fun afternoon, and Eddie thinks that nothing can ruin it…until Bill gets silent and looks scared.
He announces that he has something to say, and he doesn't want anyone to laugh at him.
Eddie starts inwardly panicking, wishing that someone—anyone—would make a joke.
But no one does. Instead, Bill spills the beans about what he saw the previous evening: the picture of George winking, and the pages of the photo album filling with blood.
Eddie looks around, realizing that everyone except Richie has a look of utter terror on their faces.
Basically: everyone has seen something deeply sinister.
This makes Eddie think back to six weeks earlier, when he saw the leper in the basement of the boarded up house on Neibolt Street…
But let's back up even earlier.
Eddie liked hanging out by the train yards, for various reasons.
Once, a man had thrown a crate off of the side of the train and told Eddie to take it back to his mom.
Inside had been lobsters. They freaked Eddie out, and his mother had gorged herself on lobster salad.
But still: the train tracks had been a happy place.
Then he went over to the house on Neibolt street, where he had seen a hobo. The hobo was pretty disgusting: vomit-stained clothes, half-rotted nose. The hobo also offered to fellate Eddie for a dime, and then chased him.
Eddie described the hobo as a "leper" until Richie told him that no, the hobo had late-stage syphilis.
This creepy incident rattled around in Eddie's head for weeks: he was, understandably, not really keen on going back to the house on Neibolt Street.
But then, one day, weirdly compelled, he went back.
Like Bill going into George's room, he felt led along by some invisible force.
He got to the house and looked under the porch, which is where the hobos hung out. There weren't any there…so he climbed under the porch.
It was a weird choice, he knew even then.
The area under the porch was rank and smelly but, even so, Eddie covered himself with an old hobo's blanket.
Then he began to think like a hobo, imagining his hobo life.
Then he saw the face at the window.
If the actual hobo was bad, this was horrific: a face split open by disease, made almost rancid, with bugs crawling over rotten hands.
Yeah. It's nasty. It offers sexual favors, and then tells Eddie to come down into the basement.
Eddie's fear-paralysis momentarily thaws, enough for him to start running.
Then the hobo is behind him, and Eddie can see It's wearing a clown costume.
In a disgusting twist, It opens Its mouth and unfurls a surprisingly long, rotten, and bug-covered tongue.
Eddie is able to get on his bike and out-ride the monster sprinting after him, but just barely.
The kids sit by the dam respectfully after Bill is done talking. They realize that this is serious business: Bill doesn't joke around.
Eddie backs him up, telling everyone about the house on Neibolt Street and then bursting into tears.
Then Ben starts talking about the time he saw the clown walking down the ice of the canal, with the balloons that flew against the wind and the face of a mummy.
Richie hasn't seen anything, and starts joshing around.
They turn to Stan to see if he's said anything…and he has a horrified, unearthly expression on his face.
"It wasn't a clown," he says. "It was…"
But just then a man named Mr. Nell walks in. And he is not happy about the mess caused by the (awesomely constructed) dam.