Oliver Queen comes face to face with the Dragon while his former teammates try to go at Ricardo Diaz’s suppliers. And Diaz uses the Earth-2 Laurel to get what he wants from new Mayor Quentin Lance.

Previously, on ARROW

Once Diggle left Team Arrow and joined ARGUS, I expected an episode where the paramilitary group collided with The Terrifics as they were trying to strike against Diaz, and we got that here. Terrific, Canary and the now-healthy Wild Dog go after what they think is Diaz stocking up on drugs from rival gang The Scorpions. Turns out, though, that Diaz’s new associates in The Quadrant were just organizing to take The Scorpions out. Diggle and ARGUS have to save The Terrifics from the firefight, which almost turns tragic when Wild Dog has a PTSD moment and freezes up.

The battleground reunion leads to Wild Dog making more snarky remarks about Oliver and Diggle offering to work together with The Terrifics to avoid a similar incident. The super-group works well together and end up destroying millions of dollars of weapons that The Quadrant is bringing in to Star City. That doesn’t sit well with Diaz, and he ends up taking it out on Oliver. But we’ll get back to that.

Diaz also uses the Earth-2 Laurel to lure her doppel-dad, new mayor Quentin Lance, to a lunch where Diaz can play let’s make a deal. The deal? Lance signs over some land to Diaz and Diaz won’t kill Lance. Lance initially tells him to shove it, but later changes his mind because he remembered the last time he betrayed a supervillain who had been blackmailing him: Damian Darhk killed the real Laurel. Sure, this pleases Diaz, but it only gives Quentin a reprieve for as long as Diaz feels like it.

And where is Oliver when all of this is happening?

After trying to appeal to Anatoly’s sense of honor, he gets captured by his former friend and brought to Diaz, who gives Oliver an offer: a loser-leaves-Star City street fight. Oliver, who has shown off any number of different fighting styles, battles the crime lord to a stalemate, until Diaz knifes him in the ribs, putting Oliver down. Anatoly, who was starting to be swayed by Oliver’s advances, sees Diaz as a man without honor, so now both of his compatriots are starting to get wary of him.

While Oliver lost the fight, even though Diaz cheated, Diaz offers him a reprieve from having to leave Star City. He can stay, Diaz says, for 25 to life. Diaz is upping Oliver’s trial date – to next week! It looks like this trial may give us some surprises…