Meanwhile, Barbara is revealed to be an addict and Montoya's former girlfriend. At his apartment later, Gordon receives a surprise visit from Cobblepot. Falcone tells Mooney that he will investigate what happened to Natalia, also telling about the Arkham Plan. After arrest, he warns Gordon that more vigilantes will follow in his path. Gordon realizes that "Balloonman" is social worker Davis Lamond, who was driven to vigilantism because of corrupt officials refusing to aid children on the streets. Mooney arranges for Falcone's lover Natalia to be disfigured in response to her own lover's beating. He gets a job at Don Sal Maroni's restaurant, and is befriended by Maroni himself. Montoya and Allen question Gordon about Cobblepot, who returns to Gotham to get revenge on Mooney. Gordon and Bullock track a vigilante who targets corrupt Gotham officials and nicknamed "Balloonman" for strapping his victims to weather balloons, which eventually implode in the cold atmosphere, giving the victim a long fall. Allen and Montoya investigate Cobblepot's mother. The former warns her by having her lover beaten. Falcone confronts Mooney for her plans to overthrow him, having heard from Cobblepot. He takes refuge in a rented trailer after his faked death, plotting his return to Gotham City, having kidnapped a teenager for ransom. Meanwhile, Cobblepot kills two men after they mock his walking pattern. While Bruce has plans to find a way to help the children, Gordon meets with Kyle who states that she has been watching him during his visits with Bruce and might have some information on the person who shot the Waynes. Gordon and Bullock arrive and catch Patti and Doug while encountering Kyle.
After Bullock's extreme interrogation of an informant, Gordon obtains a clue. Patti and Doug hijack one of the buses of street kids, including Selina. Mayor Aubrey James announces plans to help Gotham's homeless kids, rounding them up and shipping them out of town. the Dollmaker, and have been posing as members of the Mayor's Homeless Outreach Program. Gordon and Bullock start investigating the abductions of street kids by Patti and Doug, operatives of Dr. Meanwhile, Montoya threatens Barbara, Gordon's fiancee, to tell him about Barbara's unknown past.
Gordon promises the Waynes' son, Bruce, and his butler, Alfred Pennyworth, to find the real killer. Gordon fakes Cobblepot's death, and tells him never to return to Gotham. In exchange, Falcone orders Gordon to kill Oswald Cobblepot, a low-level member of Mooney's gang and informant for Gotham Major Crimes Unit (MCU) investigators Renee Montoya and Crispus Allen. Mooney has them captured, but Falcone spares them upon his arrival, revealing that he intended to end the case so that the people of Gotham could feel safe, facilitating his illegal activities. They discover that Pepper had been framed, leading them to mobster Fish Mooney, an associate of Carmine Falcone, an organized crime boss. Their investigation leads them to a parolee named Mario Pepper, whom Bullock kills in Gordon's defense. Rookie detective James Gordon and his partner Harvey Bullock are assigned to the case of the murders of Thomas and Martha Wayne, witnessed by petty street criminal Selina Kyle.