We begin in Camelot "many years ago" (which is writerspeak for "don't try to pin us down because we may screw with this timeline later). Young stable boy Arthur is already using his moves on young Guinevere, taking her to the tree where Merlin is trapped. Merlin apparently told Arthur his destiny, whispering from inside the tree. A group of young village bullies show up to taunt Arthur about his dreams for restoring the kingdom to its glory, but Guinevere believes in him.
Forward to Arthur trying to pull the sword and finding it incomplete. They rush back to Camelot where Arthur shows the people a carefully sheathed Excalibur. Don't worry, Arthur, size doesn't really matter. Guinevere is there to celebrate but she senses something's wrong. Arthur shows her the incomplete sword and tells her that his quest has just begun.
Ahead years later to the time of the Storybrooke invasion. Arthur tells David about the dagger being part of Excalibur, and recommends that they bypass Merlin and try to re-forge Excalibur themselves, chasing the darkness away forever.
Emma, meanwhile, is building dreamcatchers (great callout to season two) and hearing voices whispering in her head, calling her to the dagger. Dark Rumple leads her to the dagger in Regina's room, but Regina's put a protection spell on it, making it impossible for Emma to take it. She gets fed up with Dark Rumple and blasts him but nearly hits Killian, and she confesses to him that she's never alone - someone's always in her head.
She's clearly not doing too well and Regina suggests that she rest. Henry knows just the place, and Killian won't leave her side (of course), so off they go.