Back at her apartment, Madolyn hands Colin an ultrasound picture and says that they're going to have a baby boy.
When she heads back into the kitchen, Madolyn goes through the mail and sees an envelope for Colin with a return address of W. W. Costigan. She gets suspicious and opens it to find a CD. She plays the CD with headphones on and listens to tapped conversations between Frank Costello and Colin.
It turns out that Frank was so paranoid that he taped all of his conversations with people. So Madolyn hears everything about Colin's world of lies.
Colin calls up Billy, who tells him that Costello's lawyer came to him with everything. It turns out that in the end, Costello trusted Billy more than anyone.
Billy sets up a meeting with Colin at the building where Queenan died. When Colin arrives, Billy pulls a gun on him and tells him he's taking him back to the police station to arrest him. But Colin tells him he can't do that, because his file is gone, and none in the world (except Dignam) knows he's a cop anymore.
Billy says he doesn't care if the charges don't stick, because he's arresting Colin. At this point, another police officer arrives and pulls his gun, ordering Billy to step away from Colin.
Billy tries to explain that Colin is Costello's rat. He and the other cop recognize each other from police academy, but the other cop still can't allow Billy to leave with Colin.
Billy slowly backs away until he and Colin are in an elevator heading to the first floor, while the other cop takes the stairs.
In the elevator, Colin finally breaks and tells Billy to kill him, but Billy thinks that arresting Colin is a way of killing him in a better, symbolic way.
Now here's the part that freaks a lot of people out. The elevator doors open, and Billy gets shot through the head and killed by another cop from Colin's squad. Then the other cop from the roof comes out of the stairwell, and this new guy kills the guy who killed Billy. He tells Colin that Costello had two different cops working in the police force all along.
As soon as Colin gets his hands on a gun, he shoots this new guy in the head.
Now there are three dead bodies, and only Colin is left standing.