The infamous Arkham Asylum finally makes its first official appearance in the show. For fans of Batman, this is a big deal. Arkham Asylum is pretty much a home to every Batman villain. Ever. So, we are in for a real treat – hopefully.

Picking up from last week, Oswald Cobblepot aka The Penguin just showed up on the doorstep of Jim’s apartment. He appears giddy and chats it up with Barbara, who is either playing dumb or is straight up dumb. Jim gets Oswald outside and angrily pushes him up against a wall, threatening to kill him for real this time. But Oswald sees through the bluff. He knows Jim is the last good man in Gotham. Everyone else is bad and a war is coming regarding Arkham Asylum. Oswald believes in him (which is funny because young Bruce also believes in Jim).

Elsewhere in the city, a strange mysterious man (Hakeem Kae-Kazim) approaches a prominent councilman (Evander Duck Jr.). He asks him to look at a odd golden cylinder device, which turns out to be a weapon, stabbing the councilman’s bodyguard in the eye. The man then stabs the councilman with it after a chase. What is that device? I’m struggling to understand why he wouldn’t just shoot them – but maybe we’ll find out later.

Jim and Harvey are put on the case and are coming up with bad leads. Jim finds evidence that links the councilman to the new plans for the burned down Arkham Asylum district. Jim brings this information to Alfred and Bruce because the Waynes apparently had big plans for the area. Mobster Falcone controls the development now, but opposing mobster Maroni has other ideas. Bruce tells Jim that it was his parents dream to build a new asylum to take care of those in need. Bruce wants Jim to stop this war!

Arkham Asylum. Night. Looking uber-creepy and cool. The strange murderer from before has another councilman (John D. Haggerty)  captive. This time, instead of easily shooting him, he throws gasoline on him and lights him on fire in a cannister. Wow. Gotham went there. Jim and Harvey go to investigate the next day. With analysis from Edward Ngyma, they discover both councilmen were murdered by the same person, yet both councilmen worked for opposing crime families. So, who exactly is this strange murderer working for?

Meanwhile, Oswald has been working in Maroni’s restaurant, trying to get information. The house manager catches him spying and scolds him. A robbery later takes place, and a lot of the workers die, including the house manager. Oswald manages to survive and save some of the money. Maroni rewards him with a raise and a new suit! However, later, we find out that Penguin set up the whole robbery himself by hiring thugs. He then feeds them poisoned cannolis and creepily smiles as he takes all the money for himself. He is a crafty one, that Penguin!

Back on the investigation, Jim and Harvey interrogate a Charles Manson-like crook (Brad Calcaterra), who tells them the murderer is a guy named Gladwell and he’s a pro. I find it hard to believe in a city as big as Gotham that this crook in jail would be able to identity the killer so easily, but then again I am suspending my disbelief! Anyways, Jim and Harvey track Gladwell through a building. They almost catch him. He apparently works in HR at some company. Random. Gladwell prepares his murderous device, ready to use on Jim, but Harvey calls Jim away because he found evidence. They also find a paper with three letters: C, L, and M on it. Hmm.

When Jim arrives home to find Barbara staring out of their giant clock window, he should have just ran. She confronts him about his secrets and lies and wants to know who Oswald Cobblepot is. He refuses to tell her. She then reveals to him the truth about her and Montoya. They were in a relationship for a year a while ago and Montoya isn’t over it. Jim is PISSED. To make matters worse, they discover that the man they thought was Gladwell is actually another unknown guy who assumed Gladwell’s identity. Back to square one.

If you were wondering about Fish Mooney, well I got you covered. All episode she has been auditioning two young girls to be singers and seducers. Apparently she has a plan to use one of them as a weapon to bring down Falcone, somehow. She asks both girls to seduce her and only the second one, Liza (Makenzie Leigh), sort of succeeds by awkwardly kissing Fish on the lips and taking her drink. Harvey comes in to question Fish. He is surprised by her lack of resolve for Falcone. She says not too worry about her, she’ll be fine even if Falcone falls. Later, she makes the two girls fight each other for a spot. Sassy Liza wins the fight and joins Fish. I’m a little confused as to how this girl is going to “save” Fish, but I guess we will see.

Jim gets a call from Oswald who warns him that something is going to happen tonight and not too trust the police. Jim investigates and sees that the cops guarding the Mayor have names that match up with C, L, and M. He rushes to the Mayor’s office, arriving just before the non-Gladwell. Unfortunately, the Mayor needs to get something out of his safe, which gives non-Gladwell time to approach. Jim opens the first door and is attacked, losing his gun. They rush away and a fight ensues. Just in the nick of time, Harvey arrives, saving Jim from death. Phew. Third time that has happened. They both shoot the man multiple times as he tries to make a second stand.

Later, Barbara visits the office to apologize about Montoya. She doesn’t want any secrets between them, so she tells Jim that he has to let her in or let her go. When he hesitates, she walks away angrily. I can’t help but be happy. I felt like Jim and Barbara have no chemistry and she radically breached police protocol. I think they are both better off and I’m a little confused as to if I am supposed to be rooting for them. Oh well.

The Mayor makes an announcement about Arkham. It seems the attack on his life scared him into making a compromise regarding Arkham. Basically he says the asylum will be reopened but also low-income housing and a waste development plant will be built, which is what Maroni wants. He says that this is what the Waynes would want. But, Bruce seems to disagree. He had been having nightmares about his parent’s murders and looked into their plans. He is sad and losing hope, saying all of his parent’s work is falling to criminals. Jim reminds him that he is still honoring his parent’s work and then promises young Bruce that he will save the city. Oh, good guy Jim. You just keep being that good guy! Bruce got yo back!

What did you guys think of this episode? I thought it flowed really nicely and also advanced the plot quite a bit. I’m glad things are moving between Jim and Barbara and also with Oswald. We didn’t see much of Harvey this week and Fish’s plotline was a bit odd, but hopefully it will be a great payoff. Let me know what you guys think in the comments below!

Gotham airs on FOX, Mondays at 8/9c. Watch full episodes on FOX.com.