On the roof of St. Bart’s Hospital, Sherlock Holmes tells John Watson that everything he sees is just a magic trick… but behind the scenes, it’s more science than magic. As Sherlock bungees down from the roof, a high-tech mask of Sherlock’s face is placed on Jim Moriarty’s corpse. Sherlock bursts back into the building through a window while Moriarty’s altered body is dragged to the pavement for John to find.
At last, the mystery of how Sherlock survived the fall is explained—except that this is just a theory put forward by Anderson, the police detective who led the attack against Sherlock that destroyed his reputation. And it’s bollocks, according to Detective Inspector Lestrade, who’s just heard the whole thing. “I believe in Sherlock Holmes,” Anderson protests. “Well that won’t bring him back,” replies Lestrade.
Meanwhile, in a dungeon in Serbia a man is being beaten under the bored eye of a local commander. The man whispers under his breath to his tormentor, who starts up in astonishment and storms out. The commander gets up and walks over to the prisoner and speaks in his ear: “There’s an underground terrorist network active in London and a massive attack is imminent. Sorry, but the holiday is over, brother dear.”
Back in London, Mycroft Holmes preps his brother for his return to regular life after working undercover to untangle Moriarty’s crime web. He tries to warn Sherlock that it will not be easy to pick up where he left off with John Watson. Two years have passed, and John has moved on with his life. “What life?” demands Sherlock. “I’ve been away!”
Meanwhile, John is planning to propose to his girlfriend Mary that night, but as he fumbles for the proposal Mary knows is coming, the waiter interrupts, and John looks up to see Sherlock. He rises to his feet, speechless, and as Mary puts two and two together, and Sherlock criticizes John’s new moustache, John relieves his feelings of shock and betrayal in the most direct way possible—a brawl on the floor of the restaurant. Thrown out, the three retire to a nearby café, but when Sherlock asks John to help him on the terrorist case, a head butt ends the reunion.
Molly, Inspector Lestrade, Mrs. Hudson, and even the morose Anderson are all given their own shocks by a suddenly reappearing Sherlock, and then the detective is back in his flat and receiving clients.
Substituting Molly for John, Sherlock follows up on a video of a man getting on a subway car at Westminster station, and then disappearing from the car when it arrives at the next stop, St. James’s Park. After Molly tells Sherlock she can’t continue to help him without entangling her emotions, John shows up at Baker Street, but he is immediately drugged and spirited away from the doorstep. Mary receives coded texts about the kidnapping and goes to see Sherlock; together they track John down to a Guy Fawkes celebration—to be precise, in the center of the wood piled up for the traditional bonfire. Sherlock and Mary save him from a fiery death at the last moment.
Finally back at 221B after his ordeal, John listens as Sherlock describes the terrorism case he’s working on, and Sherlock suddenly realizes that the man who disappeared on the subway train is the Minister for Overseas Development, a double agent working for North Korea. The car the Minister was on was detached from the train at a station unmarked on any map, one that was created but never put into service—Sumatra Road, located directly under the palace of Westminster, which houses the British Parliament.
Now the plot is clear: the missing subway car has been left under the Houses of Parliament and rigged with bombs that will be detonated by the Minister during an important session in which an anti-terrorism bill is being voted on. The attack will destroy Parliament on Guy Fawkes’ Day, November 5, a holiday that commemorates Fawkes’ attempt to blow up Parliament with gunpowder hidden under the House of Lords in 1605.
Sherlock and John sprint to the subway and find the car loaded with explosives. John urges Sherlock to think of a way to defuse the bombs, but Sherlock falls to his knees, helpless. As time ticks away, he begs John to forgive him for deceiving him, and under the pressure of near death, John does so.
As John prepares for the blast, a video of Sherlock begins, explaining what really happened at the Reichenbach Fall: Mycroft fed Moriarty information about Sherlock so Moriarty would give them hints about the extent of his crime network. Once Moriarty believed he had the upper hand, Mycroft released him from prison to begin his work of destroying Sherlock’s reputation and forcing him to commit suicide. After Moriarty himself committed suicide, Sherlock texted Mycroft and set a plan in motion in which his homeless operatives laid out a large airbag just out of sight from the location Sherlock commanded John not to move from. Everyone on the street who “witnessed” the jump was in on it. Sherlock landed on the airbag, it was deflated and carried away, a corpse provided by Molly was laid on the sidewalk for John to see, and then the cyclist knocked John out so the corpse could be taken away and Sherlock put in its place, with blood applied to his head and pressure placed under his arm to temporarily stop his pulse. John finds Sherlock’s body, and the game is complete. But who was the corpse? The man Moriarty hired to kidnap the children of the British ambassador, chosen because of his resemblance to Sherlock, and then eliminated once Sherlock was under suspicion for the kidnapping and the double was no longer useful.
Back in the rigged subway car, as John braces for impact, Sherlock begins weeping with laughter. “There’s an off switch. There’s always an off switch.” When he fell to his knees, he actually hit the switch, then sat back to receive John’s forgiveness.
The Minister for Overseas Development is arrested, and the press gather outside 221B Baker Street. As Sherlock basks in the press attention, the scene turns to a strange room filled with odd objects, and a pale man sitting in front of a sea of video screens, all showing Sherlock and Mary rescuing John from the bonfire. His pale blue eyes, behind gold-rimmed glasses, focus on Sherlock’s face in freeze-frame.