Both the Black Knights and The Irregulars have word of some drug called "Refrain" that is spreading around the Japanese population, a drug that traps people within their past memories and continuously loops them until they suffer permanent brain damage. The Irregulars believe that it could be connected to Mao, "The Refrain," a Geass-user who deserted the unit some time ago.
Back at school, Nunnally has a chat with Nemo, who tells her that C.C. is actually a copy of Joan of Arc (or perhaps even the original) who survived the Hundred Years War because she is an immortal witch. That same witch apparently entered a contract with Lelouch, who asked her to protect Nunnally. While Nunnally mulls over this, Mao appears behind her, and unwraps bandages on her own right arm. She reveals that the Geass is slowly eating away at her body, even though injecting herself with C.C. cells helps temporarily she will die without help. Apparently, Mao's Geass allows her to read minds. Just as the Mark Nemo is about to appear to fight her, Mao opens up her left eye and plans to trap Nunnally in a "Prison of Happiness."
With her Geass of Refrain, Mao traps Nunnally within her own memories of the various events that happened between herself, Lelouch and Suzaku as little kids, and how C.C. was involved directly or indirectly with all of them.
After trapping her in a memory loop, Mao tries to absorb Nemo's power, but the entity somehow turns into Lelouch, and then C.C. herself, and rejects Mao. Finally, Alice shows up with a gun and a briefcase containing C.C. cells. Mao pleads with her for the drug, but Alice's speed is too much for Mao to handle. Then in an act of cruelty she simply shoots the drugs with her gun and watches Mao crumble into dust. As Mao slowly withers away, she tells Alice that this will be the fate of all Irregulars.