Still shaken by the information she received from the Men In Black, Lain discovers that she is being blamed for spreading an ugly rumor in the WIRED. Is what the MIB said is true; is she another person in the WIRED? Or is she doing it herself? Lain must find out or risk losing the one true friend she has.

A documentary about Roswell gives Lain some valuable information about the pioneers of the WIRED. Later, at the Cyberia, J.J. tells Lain that she left something the day before and hands her an envelop with the Knight's logo on it. The envelop contains a chip. Believing this was the other 'Lain's' doing again, she decides to call Taro's bluff and go on a 'date'. Taking him to her room, Lain demands that he tell her what he knows. Together, with Taro's information and the mysterious chip, Lain finds out more then she expected.

Lain struggles with her identity. Is she a human being, or just a hologram? And are the Knights responsible for the Evil Lain? Lain decides to deal with the Knights once and for all.