In the shady streets and alleys of Limehouse, Watson describes the decrepit sights of opium houses, and is fooled by Holmes disguise as he offers aid to the pathetic figures he finds. A man has been spotted in disguise and Holmes suspects the fake opium addict as planning a murder.
Back in Baker Street, Holmes is approached by Mr Layton about a business deal, and suspicions of espionage. Is Layton a potential killer? Another visitor could be the intended victim, and a connection to the opium dens may hold the clue to tie it all together. What will our heroes find, back in the waterfront district?
With no sign of Holmes, or the two opium addicts, Watson takes the matter to the police. As one victim reaches his dying breath, he whispers a word that Holmes knows is a clue to close the case. Back to Limehouse, and the truth. In epilog, Holmes explains the case to Watson, clarifying how he put the clues together to figure it out.