'Teen Wolf' Recap: 'Dreamcatchers' Season 5 Episode 3, The Nightmare Continues

The mind-bending MTV hit show "Teen Wolf" doesn't seem to let up in the suspense department.

After a new character named Tracy came on the scene in last week's episode, things get an added twist this week in "Dreamcatchers" the third episode of season five.

The team has word that Tracy is a werewolf making her even more dangerous, other than the fact that she has a serious sleeping disorder and she's being controlled by the mysterious villains. The Stilinski's are being stalked by a shapeshifter and Scott is in charge if taking it out.

Meanwhile, Malia's family hasn't always been explored in "Teen Wolf," but tonight she finds out something about her mother. Scott, Stiles, Lydia, Malia, Kira and Liam faced the daunting task of capturing Tracy.

"Teen Wolf" kicks off as the Sheriff suits while his prisoner is taken out of custody by an apparent lawyer. The Sheriff is getting ready to go on a date and while Scott is very supportive Stiles is reluctant until he finds out who the mystery woman is. The prisoner is wanted for 3-5 years and upon hearing that, he threatens the Sheriff.

He says he's going to find him, stab him with a knife and when the Sheriff asks why he's going to relive that moment.

Stiles gives a little smartass comment towards the prisoner who failed a test to become a deputy, hence his distaste for the Sheriff.

The prisoner is scolded by his attorney when suddenly the driver of the transport vehicle shows signs of heart attack symptoms. He loses control of his legs and the car is traveling out of control. The attorney tries to control the vehicle and manages to hit the brakes before a big crash occurs. However, upon the vehicle stopping, there is something on the roof.

They are all attacked by Tracy and while she attacks everyone else in the vehicle, the prisoner escapes. The attorney is Tracy's father and she kills him.

The prisoner hears the cries behind him and stumbles only to look up and find one of the masked villains who grabs him while another walks towards him.

They begin drilling inside of his head and it looks like they have found another weapon.

Stiles continues to have car troubles and tells Scott that he's sensing anxiety. Scott asks him if he's okay and Stiles shows him a photo of what the Desert Wolf is capable of. Kira and Lydia are teaching Malia how to drive since it didn't go so well for her the last time.

She has a flashback of the accident that left her in the woods before starting the engine.

She starts moving and the girls begin nervously directing her. She doesn't quite have control of the vehicle and quite frankly it's a disaster.

When Kira tells Lydia that they are heading downtown instead of school, Lydia tells them to keep going and it looks as if there is something wrong. They find the wreck and the injured attorney. The Sheriff is called in and his first suspect is the kid who threatened his life.

Scott is asked to assist them in finding Donovan but Stiles might already have a clue. Scott is attacked by Donovan but throws him off of him and radios the Sheriff.

Donovan was muttering Tracy's name the entire time and Lydia who is also listening along knows exactly what Tracy they are talking about.

The pack gets together and it looks like Liam's friend is in on the plan to find Tracy too. Stiles asks what they do when they catch her and Malia immediately says put her down. However, Scott urges them to concentrate on finding Tracy first. The Sheriff has the task of questioning Donovan as to what happens.

Donovan is not cooperating even when the Sheriff tries being nice to him. He is suffering from whatever was drilled into his head but tells the Sheriff that he wants a new lawyer.

Tracy is on a killing spree as she also seems to have taken out her psychiatrists.

Stiles shows Malia the photo of what her mother did and she finds out that he mother is a killer. Meanwhile, Scott does well on his AP Biology exam and is asked to lead a discussion on the lesson.

He's distracted by Liam who is trying to get his attention to tell him that Tracy is at school in his History class.

The scene pans to Tracy who looks as if she is about to turn in the classroom filled with students.

Tracy is struggling to hold it together in class and begins scratching on the desk. Liam's old friend looks over and asks Tracy if she's okay. There is no response from Tracy and the fire alarm goes off. The girl tries to get Tracy to leave but she appears to only see the three masked villains approaching.

In reality it's Scott, Kira's dad and Liam. Tracy draws blood on the girl and when Scott approaches her, she says, "they're coming for all of us," then collapses as a strange fluid rolls out of her mouth.

Scott and the pack take her away and Liam offers to help his old friend but she says she is okay. When she gets to the bathroom she rubs the blood off but there is no scar.

The team immediately begins questioning what pack Tracy is a part of and they rush to meet Brett and his pack. Deaton takes a look at Tracy and Malia is adamant on them killing her. Deaton suggests extra security instead and cloaks the room.

Stiles has to tell his father that they have Tracy in their possession until they figure out the next step. Kira and Lydia explore Tracy's room but have no idea what they are looking for.

The mountain ash is barring Scott and Malia along with Tracy, however Stiles and Deaton are free to leave. When Deaton tries to make an incision, the blade proves to be too small.

Liam seeks information from Brett and while they listen to him, Liam finds out that Tracy is wearing a necklace similar to the one in the hole he fell through last episode. Kira and Lydia find a "Dreamcatcher," and they realize that Tracy is killing people she doesn't really want to kill as well as the fact that she's still in a night terror. Deaton finds something interesting moving around under Tracy's skin.

Upon hearing what happened to the driver Stiles thinks he knows who Tracy is. Meanwhile, Tracy's back opens up and out pops a tail. She isn't a werewolf, she's a Kanima.

They are all paralyzed by the fact that they've all been hit by the tail of the Kanima. Deaton tells Scott an Malia that if they focus on healing they will be able to heal faster that him and Stiles. They lay helplessly while Tracy the Kanima is on the loose.

Liam and Brett walk through the woods and Liam's friend finds the hole, but no necklace. Brett tells them that the hole isn't a sinkhole, Tracy was buried in there.

Stiles tries to joke about moving while Malia makes progress and is the first one to move.

Even when Scott tells her to wait Malia says she can find her and Scott tells her to save her, rather than kill her.

Kira and Lydia are still snooping around the room and they realize that Tracy is after Lydia's mother who was trying to help her with her night terrors. The Sheriff's mystery woman is Lydia's mom but while they are at the station, they see that Tracy has already struck. She's taken out the deputies and just as Lydia and Kira come in they all look up to find Tracy on the ceiling.

Liam is digging in the hole for the necklace but can't seem to find it. He says he doesn't think it's the hole he was in because that one is closer to the bridge.

The second hole suggests a second Kanima as the camera pans to Donovan who awakens by the commotion at the station. Kira is does her best to battle the Kanima and when Lydia tries to block Tracy from going after her mom, she is struck by the tail. Kira enters a new phase of being a Kitsune and slices the tail off of the Kanima.

Tracy escapes as a brand new Kira emerges surrounds by a amber light. Theo finds Scott and offers to help him without being a member of the pack. Scott is still a bit reluctant but doesn't have a choice.

Lydia tries to tell Malia that Tracy is in a dream-state and Kira has to stay and tend to Lydia who doesn't look so good. The Sheriff directs Malia to the basement where Tracy is keeping Lydia's mother. A battle ensues between the two and Malia seems to be in complete control.

She subdues Tracy and pulls her knee away from her neck before she kills her. Malia talks her down and tells her that she's not dreaming.

Tracy asks what's happening to her and before Malia can get to her the masked villains kill Tracy right in front of Malia. The strange thing is Malia is unharmed as the killers leave.

"Dreamcatchers," manages to up the ante even when that seems impossible after the season five premiere of "Teen Wolf." The character development of Malia along with the packs continued ability to work together is pretty incredible.

Scott and his pack have the entire evil villain search down as they should after seasons of countless battles. Fans will have to tune in next week to find out what happens on Monday at 10PM EST.