Jack finds the C-4 in the bag Locked swapped with his

As the submarine dives into the ocean, Jack is trying to treat Kate's bullet wound. Kate asks where Claire is and Jack tells her that she's still on the island. She objects, but is too weak. Hurley says that he can't find a first aid kit.

Jack asks Jin to hand him his bag that has a shirt he can use to apply pressure to the wound. As Jack is opening the bag, he says that he thinks the bullet went all the way through Kate. As he reaches his hand in the bag, he pulls out three blocks of C-4 (from the Ajira plane) attached to the digital watch that Locke took from the body of the Widmore's guy that he shot. The timer on the bomb is counting down from 3 minutes and 54 seconds. Jack says that they did exactly what Locke wanted.

This is an amazingly elaborate plan that Locke managed to pull off. He got everyone in one place with a bomb, just like Locke claimed Widmore was trying to do putting the explosives on the plane. This is the longest of cons that has played out over many years. The results are coming up.