(SPOILER ALERT)
Sunday night's episode begins with Dwight watching "Who's The Boss?" and enjoying the spoils of being Negan's loyal henchman, stealing food from various survivors in Negan's sanctuary to make himself a sandwich.
He serves up a dog food sandwich to Daryl, who's naked, filthy, and in a cell, where he's being deprived of sleep with loud, bad music. Eventually, Dwight throws Daryl an outfit with an A spray-painted on it.
Read: 'The Walking Dead': What About Morgan and CarolHe's taken to a doctor for evaluation. "Negan will take care of you," the doc assures him; there, we see Sherry, the girl who, along with Dwight, stole Daryl's gear last season. She's apparently failed a pregnancy test; it's negative.
Daryl is shoved outside, where other prisoners, also dressed in sweats with a letter painted on them, are made to fight walkers hand-to-hand. This could be you, Dwight warns, or his life could be much better if he submits to Negan.
"I don't kneel," Daryl hisses back.
In a chat between them, we learn Negan tasked Dwight with breaking Daryl. He offers him women -- even Dwight's ex -- as a reward; Daryl declines. They get a radio call that someone escaped from the compound. He offers to investigate; even though it's "grunt work," Negan appreciates the initiative.
With Dwight away, Fat Joe gives Daryl his food -- and seemingly forgets to lock the door. Daryl sneaks out.
Meanwhile, Dwight investigates outside the compound, finding lots of walkers on a highway in various states of disability. He looks up at a bridge just in time to see a walker mindlessly fall off, knocking Dwight to the pavement. He's surrounded by walkers crawling all over him.
Meanwhile, Daryl runs into Sherry, who warns him to go back to his cell. He ignores her and runs outside to find some motorcycles -- and Negan and his men, who surround him. "Pi--ing your pants yet?" Negan asks, as he did in the season premiere before killing Glenn and Abraham.
Negan tells Daryl he could be dead, or working for "points," or be one of his men. He even threatens him with Lucille; but backs off. "You don't scare easy," Negan says. "I LOVE that!" He spares Daryl from Lucille, but his men beat the prisoner down.
Back in his cell, Sherry tells him how sorry she was for stealing his bike with Dwight last season, which set some terrible events in motion. Meanwhile, Dwight has found Gordon, the escapee.
We learn from him that Negan stole Sherry from Dwight. He wonders why everyone listens to Negan and refuses to return. Dwight eventually shoots Gordon in the back.
Back at the sanctuary, Dwight runs into Sherry. "We did the right thing," Dwight tells her. "It's better than being dead." She agrees hollowly.
Dwight visits Daryl in the cell, jealous that Negan "took a shine" to him. He sticks the Polaroid of Glenn's smashed head to the cell wall. Daryl breaks down.
Sometime later, Negan asks for a meeting and questions him, showing him what could be his if he just surrenders. We also learn what happened between Sherry and Dwight last season, when they ran into Daryl in the burned forest. They'd escaped the sanctuary with medicine for her sister and stole Daryl's gear and bike in an attempt to escape; they eventually returned to beg for forgiveness.
Negan burned Dwight's face with an iron but spares his life when Sherry volunteered to marry Negan.
Negan questions Daryl, going over his options again, and asking him a final time, "Who are you?" Negan wants Daryl to to answer "Negan."
Instead he answers "Daryl."