Batman showed up at Arkham Asylum to talk to the Joker. Gordon escorted him into the clown's cell. He gave the Joker the opportunity to give up before one of them killed the other. When he was silent, Batman realized it wasn't the Joker, but a man in white makeup. Elsewhere, the real Joker was buying a rundown circus.

A man came home to his 6-months-pregnant wife. He told her he'd failed the audition (he was a stand-up comedian) then broke down in her arms.

Joker killed the salesman and began moving into his new home. Afterwards, he rang the doorbell of Commissioner Gordon. Barbara was there with him helping him work on a scrapbook. He shot her in the stomach, piercing her spine. While his men roughed the Commissioner up, the Joker undressed Barbara and took pictures.

The father-to-be met with some men in a bar. He had agreed to help them break into a laboratory where he used to work. They gave him a mask - a red hood - to wear.

Batman and Bullock got the news on Barbara from her doctor - she'd never walk again. Bruce tried to comfort her when she woke up. Her father woke up naked in the Joker's circus. He was taken to his captor. Joker was planning to drive him mad.

As the Red Hood plans were being finalized, police entered the bar. The man's wife had been found dead - electrocuted in a freak accident.

While Batman searched for his nemesis, the Joker put Gordon on a ride and showed him the pictures of his daughter. Batman returned to police headquarters empty handed. Bullock gave him a ticket to the circus with Joker's picture on it.

The Red Hood led his gang into the chemical plant. Security saw them almost immediately and opened fire. Batman arrived and chased the "ring leader." The only way for him to escape was to jump into a vat of chemicals. He washed ashore outside - his skin had been bleached and his hair was green.

Batman arrived at the circus and let Gordon out of his cage. He ordered Batman to take the Joker down by the book. Batman found him and they struggled. After defeating him, Batman continued the offer he'd begun at the Asylum - he didn't want them to end up killing each other. He offered help. The madman told him he was reminded of a joke - after reciting it, both had a hearty laugh.