Season 2 - Episode 5 "Dream Logic"

When people start going on killing sprees and then die of extreme exhaustion shortly after, Fringe is called into investigate. However, Olivia is still distraught over the loss of her friend, Charlie Francis, and turns to Sam Weiss for help. But as more and more people continue to die, Olivia and the team are getting nowhere. That is, until they discover that the people who have been dying are all implanted with a chip to help control their sleep. This chip can send the dreams of the user wirelessly, which causes the people to believe that they are in a nightmare, which is the reason why they are killing. With some quick detective work, Olivia discovers the man behind this is the doctor who implanted the chips, and that he is now addicted to his patient's dreams. Disgusted with himself, the doctor commits suicide and the rest of the patients are saved. Olivia returns to Charlie's grave, and with some help from Sam Weiss, we discover that she is going to be fine. We can not say the same about Peter, who is now haunted by dreams of Walter coming into his bedroom as a child.

And where is the Observer? Well this week I found him very cleverly hidden in the hospital when all the people with the computer chip in their brains are lining up to go into surgery. There is a shot of Olivia talking to the nurse, and then a cut to the people complaining below, and then a shot of Olivia talking to the nurse. On the second shot of Olivia talking to the nurse, he walks out from behind a pillar. He is in the picture below, with a red box around him. Don't feel to bad if you missed him, it was difficult this week.