Alfred arrives and takes Batman into the car and drives him to the Manor. Batman tells him to 'take poison...blood...blood poison', before passing out. Hearing his father's voice asking 'Bruce, why do we fall?", Bruce wakes up in his bed as if from a nightmare. Alfred reveals that he has been unconscious for 2 days and that today is his birthday -- 'many happy returns.'
Bruce tells him that he has felt the effects of whatever Dr. Crane used on him before but not as strongly. Fox comes in and warns Bruce that he's been 'hanging out in the wrong nightclubs.' Alfred explains the he called Fox to help treat Bruce. Fox, after making a point of how hard he has worked to save Bruce, explains that he has created an antidote to the toxic gas.
When asked if he could make any more of the antidote, Fox expresses concern that Bruce is willing to 'go back to the same club' and gas himself again, but he promises to bring what he has. He also explains that the antidote will inoculate people against the toxin.
Rachel turns up at the Manor to give Bruce his birthday present and to apologize that she can't make his birthday party that night. Her boss has been missing for two days; she jokes bitterly about searching the river for his body. She cuts away from the conversation as she get a message informing her that Falcone has been moved from prison to Arkham on Dr. Crane's orders. She rushes off to challenge Dr. Crane's decision.
Knowing the she is in danger from Dr. Crane, Bruce changes to Batman, despite the guests who will soon arrive for his party. Rachel arrives at Arkham and watches Falcone -- now genuinely insane -- mumbling the word "Scarecrow" over and over. When she questions Dr. Crane on the meaning of scarecrow, Dr. Crane explains that a significant number of inmates focus their paranoia on an external tormentor, such as a scarecrow.
Both are unaware that Batman is listening from outside. When Rachel demands that Falcone be evaluated by Dr. Lehmann, the court's psychiatrist, Dr. Crane leads her into the lower floors of the Asylum. To her horror, Dr. Crane brings her to the basement where inmates are pouring a toxin into the water pipes below.
Rachel runs for it but Dr. Crane catches her, now wearing his burlap mask, and gases her with his toxin. A terrified Rachel is interrogated by Dr. Crane in the basement. Suddenly the lights go out. Dr. Crane acknowledges that the Batman has arrived. He tells the guards not to worry about Rachel as she has been given a concentrated dose and will not last long, but to phone the police.
He explains that the police can't stop the toxin, but Batman might -- unless the police stop him first. Although Dr. Crane's henchmen are prepared, Batman appears in the basement and overcomes them all easily. He gasses Crane with his own toxin. He interrogates Dr. Crane, who lets slip that he is working for Ra's al Ghul before passing out.
Batman picks up Rachel and takes her high up on the landing before the huge stairway at Arkham's entrance. The police arrive. Not willing to wait for backup in the form of a SWAT team as Flass is, Gordon goes into the building and is grabbed by Batman. The SWAT teams arrive. Batman explains to Gordon that he needs to get Rachel to his hideout so he can give her the antidote to the toxin.
But Batman can't escape the Swat team while carrying Rachel, so he asks Gordon to carry her to the alley outside on the Narrows side. He then activates a device in the heel of his boot, which emits a high-pitched scream. Gordon takes Rachel down the stairway as SWAT raids the building. As they begin to set up, a huge swarm of bats breaks into the building in response to Batman's signal.
With bats everywhere distracting the SWAT officers, Batman drops from the stairway using his cape to land safely. He breaks into the prisoners' area, courteously apologizing for disturbing the inmates, and uses explosives to break outside. There he meets Gordon and takes Rachel from him. Batman refuses further help from Gordon, knowing he can't take him too, and gets into the Tumbler.
He heads back through Gotham pursued by police cars and helicopters. A very dramatic car chase ensues as Batman weaves through parking garage ramps, over church roofs, underground tunnels, and highways, destroying multiple police cars with evasive manuevers and caltrops to blow out their tires, and makes it back to the cave.
He finds that Fox has delivered three vials of the toxin antidote, one of which he uses to save Rachel. Gordon gets a report from the detectives studying the toxin in the water. Gotham's whole water system is laced with the stuff; it must have taken weeks to prepare the material. No one has noticed anything up to now because the toxin apparently has no effect unless it's inhaled.
Meanwhile, Rachel wakes up inside the cave and Batman explains what has happened. He tells her he is going to sedate her and when she wakes up she will be at home with the two remaining vials of the antidote. She must get them to Gordon -- one for him to inoculate himself and one for mass production. He sedates her and gets changed for his party.