In Storybrooke, Mr. Gold grows increasingly suspicious of August’s true identity and reason for coming to town, especially after he finds August snooping around his office. August lies (badly) about mistaking Gold’s office for part of the shop, so Gold does a little snooping of his own. He finds a drawing of the Rumpel killin dagger among August’s belongings and realizes who the mysterious stranger might really be. In a scene that’s a little bit funny and a little bit sad, Gold pours out his heart to Archie. August, he believes, is his long-lost son. He’s come to town to kill his father.
Flashbacks to Fairy Tale Land make this seem pretty likely. As Rumpelstiltskin’s magical prowess grows, so does his son Baelfire’s fear that he’s losing his father. Rumpy kills a man he thinks has caused Bae to hurt himself, even as Bae pleads with his father for mercy. Bae begs his father to give up magic. Bae strikes a deal with him: If he can find a way for his father to safely rid himself of the magic, then they’ll go back to their normal lives. Rumpy, feeling quite confident that such a thing is impossible, shakes on it.
Bae eventually finds the only thing powerful enough to grant his wish. It’s the Blue Fairy, and she gives him the last magical bean in existence. While it won’t rid Rumpy of his magic, it will take them to a place where magic doesn’t exist. Bae’s excitement is short-lived, however, as he tosses the bean to the ground and his father refuses to follow him into the resulting interdimensional vortex to Mundanesville. Bae realizes his father has betrayed him by going back on their deal. It’s his last thought as he and the vortex disappear. Rumpy immediately regrets his decision and begs the Blue Fairy to let him be with his son. Alas, without any more magic beans, the only way to get to the magic-free world is to work some crazy huge magic and Rumpy isn’t powerful enough. Yet. So all his myriad machinations and deal with the Queen were to get him into a position to create Storybrooke. That is one helluva long con.