Ugarte fires a few shots in the direction of the guards (not the best idea he's ever had) and, after frantically appealing to Rick for help, is apprehended. Strasser is pleased. Which is good for everyone, because no one wants a displeased Nazi.
Rick apologizes to all of his patrons for the disturbance, before being halted by Major Strasser for some unofficial questioning. Strasser grills Rick about his nationality and allegiances, but doesn't get much out of him.
He expresses his concern that Rick might try to help Laszlo, who was previously arrested for publishing anti-Nazi propaganda. (Nazis were not really "freedom of the press" people.)
Well, lookee who we have here. Victor Laszlo himself has walked through the door (with Ilsa, his aforementioned lady friend) and asked for a table. He really should have gone with his gut and headed over to Olive Garden instead.
As they pass the piano, Sam looks at the woman, and it's clear he recognizes her. And that it isn't good.
Once they're seated, Victor and Ilsa are approached by Berger, a man who's apparently there to help them, but his efforts are cut short when Renault appears at their table. Renault makes nice though (for now, at least), and joins them for a drink.
Ilsa mentions that Sam looks familiar to her, and Renault tells her that he came from Paris with Rick.
When pressed about this "Rick" character, Renault mentions that, if he were a woman, he'd probably be in love with Rick. ("if he was a woman" suuuure)
Things really get going when Strasser joins the party. There's some definite animosity between he and Victor, but Strasser is seemingly hesitant to pull the trigger—literally or otherwise—since Victor is now on French soil.
They arrange to discuss the nature of Victor's presence on said French soil the following morning in Renault's office. Holding it together heroically during this exchange, Victor successfully refrains from soiling himself.
As soon as he's able, Victor zips over to the bar to find out what Berger knows. He is informed that Ugarte, who was supposed to supply him with his letters of transit, has been arrested. D'oh.
Back at the table, Ilsa strikes up a conversation with Sam, and they clearly remember one another. Ilsa tells him to, "Play it, Sam" in her best "this is sure to be a famous line" voice, and Sam begins playing "As Time Goes By."
Rick comes running out of his office, yelling at Sam for playing that song. Then he sees Ilsa sitting there, at which point he goes white as a sheet. She either broke his heart or stole his iMac, because he does not look happy to see her.
Renault and Victor suddenly arrive at the table, and whatever's going on will have to be pushed under the rug for now.
Rick breaks his usual rule and agrees to join them all for a drink. It becomes clear to everyone that the two have a history, but they're careful not to divulge any of the juicy details.
The gang decides to call it a night, and Victor and Ilsa leave to catch a cab. Rick sits down to catch his breath.