First, we have a big werewolf info dump where we learn that lycanthropy is something in the DNA, so it passes among family lines; werewolf bites are fatal to vampires and so the vampires have been killing off the wolves for centuries, leaving them almost extinct; and one would have to kill to trigger the curse. Stefan and Caroline come close to learning the hard way about the fatality of the werewolf bites when Mason fails to fully secure himself during his transformation, but Tyler saves the day. Damon, in typical Damon fashion, makes things worse when he antagonizes Mason and stabs him with a silver knife.
Later, Stefan chains Katherine up in an effort to get her to tell him what she’s really up to. You have to give her credit: she sticks to her “I’m here for you” story right through to the end. She even goes so far as enlist Caroline in keeping Elena away from Stefan, which leads to a faux break up for our schmoopy couple. But no one really believes Katherine’s story; she’s clearly up to something.