The very beginning of the episode reveals that the boy in Tohru’s memory who gave her the hat was Yuki. While it was strongly hinted at in the previous episode, it was officially revealed through visuals here.
Early on in the episode, Hiro gets a phone call where he learns that his mother is pregnant. Tohru and Kisa are excited, and after Momiji finds out, he becomes excited, too. During a conversation it’s mentioned that they don’t have to worry about Hiro’s new sibling being a zodiac member, since all of the zodiac members are currently alive. For some reason, though, this conversation made me realize that Yuki and Ayame’s parents are the only branch of the Sohma clan to have more than one child with the zodiac curse. And maybe that’s part of the reason why Yuki’s parents treat him the way that they do? Perhaps they were fine with one child having the zodiac curse, but having a second child and discovering that child was also cursed may have just been too much for them. Would this excuse their behavior toward Yuki? No. But it might explain some of it, and why they shipped him off to Akito and ended up dealing with the psychological torture that he endured during that time.
Momiji and the others had bought watermelons, so Momiji decides to have a watermelon splitting contest to celebrate the news of Hiro’s forthcoming sibling. Unfortunately, they don’t have a blindfold or a stick. Haru just goes for it with a karate chop and splits one of the watermelons open… and that was amusing. Tohru decides she’s going to try, and as she’s about to mention that she did this with her mother before, she clamps up right when she’s about to say “mom” (thanks to what Hiro said to her in the previous episode, Tohru has become self conscious about mentioning her mother), and makes a sudden change to what she was going to say. Hiro realizes that what he said to her affected her more than he realized, and Kyo picks up on it as well. Of course, Tohru’s attempt to karate chop the watermelon doesn’t work. Later, after the younger Sohmas fall asleep on the floor and Tohru places a blanket over them, Yuki watches with a smile… but as soon as Kyo shows up to talk with Tohru, Yuki’s expression changes and goes for a walk.
Two important things happen at this point. At the beach house, Kyo has a conversation with Tohru where he asks her about what Hiro said and how he’s noticed she’s acting differently. Tohru works up the nerve to ask Kyo about his parents. He explains that he’s estranged from his dad, but as he starts to say that his mother killed herself, he quickly changes it to say his mother died in an accident when he was very young. Kyo’s tone with Tohru during this conversation is so much different than the brashness he’s displayed in the past, and it’s becoming more obvious here that being around Tohru is changing Kyo. But it’s disappointing to see that he lied about his mother to her, though. Meanwhile, while Yuki is out on his walk, he encounters Akito and Kureno.
Later, Shigure takes the other Sohmas (except for Kyo) to see Akito at the beach house annex,and the others are surprised to hear that Kureno came as well, since they rarely ever see him. However, as we see later, Kureno is hidden away when Akito goes to see the younger Sohmas. We also get to see a scene between Akito, Shigure, and Hatori. Akito mentions seeing Yuki earlier, and makes a comment about how Yuki is useless and really needs to return to Akito. This ties in with a scene that happens at the end of the episode.
Tohru and Kyo are left alone at the beach house, giving them time to get closer. But as night falls, Tohru is concerned that the others aren’t back yet. She goes out to see if she can find them, and she encounters Yuki on the beach. This is when the final scene takes place, and we hear Yuki talking about “lifting the lid,” which seems to imply that he said something to stand up to Akito, hence Akito’s attitude and comment earlier. In this scene, Yuki also thanks Tohru for remembering a certain memory, and basically tells her that he was the one who gave her the hat. But the final part of that scene, though, was almost a tearjerker.
At first, it didn’t seem like much happened in this episode, but looking back after watching it, I realize a lot more story progression happened here than met the eye initially. While I have vague memories of reading this part of the story in the manga, I don’t remember a lot of details… but I believe this is going to be the start of a major “sea change” for the characters and the progression of the story.