Sawyer makes up a backstory for Horace, chooses name James LaFleur

Sawyer wakes up on a couch in the recreation room in the Dharma barracks (this is the same room Kate was kept in when she was caught trying to free Jack from the others in season 3 and where Locke held Sayid and Ben in season 4). A Dharma logo is hanging on the same wall the couch is on. This logo was not there in previous episodes, so the others/hostiles most likely removed it.

When Sawyer wakes up, Horace Goodspeed is standing next to him. They begin to talk and Horace tells Sawyer that they have a defense protocol to protect them from the hostile, indigenous people of the island that they don't get along with. Sawyer tells him that his name is James LaFleur but he can call him Jim. Everyone told Horace that he needed to talk to Sawyer because he is the boat captain. Sawyer tells him that their salvage vessel got caught in a storm and shipwrecked and that it probably hit the reef. Sawyer continues telling him they were looking for a famous an old slave ship called The Black Rock out of Portsmouth, England. Horace says that he hasn't heard of the ship. Sawyer says that they were wandering the jungle looking for missing members of his crew when they found Amy and the hostiles. Horace tells him that he's sending him and his crew to Tahiti on the submarine. Horace continues saying that Sawyer and his people can't stay on the island and look for their missing crew because the only people allowed to stay in the compound are members of the Dharma Initiative. Horace closes by telling Sawyer that he is not Dharma material.

Juliet works for Dharma motor pool, delivers Amy's baby

Amy is in labor in the Dharma infirmary. The doctor says that the baby is upside down in the womb and she needs a Caesarean section, but he can't do it because he is an internist. The baby is two weeks early and Amy was supposed to leave the island and give birth on the mainland like all of their women do. Sawyer goes to get Juliet, who is working in the Dharma motor pool. He finds her underneath one of the vans. By the way, the wrench Dharma logo is a bit too spot on. It's definitley the cheesiest logo so far. Juliet reluctantly goes to deliver Amy's baby and the internist doesn't want her to, buy Amy says she wants Juliet to do it.

While Juliet is performing the Caesarean, Jin, whose English is much better now, comes by to talk to Sawyer. Jin says that he's searched grid 133 today and there is no sign of Locke and the rest of their friends. Sawyer says that they'll move on to grid 134 then and they have to keep looking "as long as it takes." Juliet exits the infirmiry in tears and tells them that both Amy and her new baby boy are okay. Sawyer seems incredibly pleased with a big grin on his face.

So what hasn't happened on the island yet that allowed Amy to give birth to her baby? It seems that Juliet would have realized that Amy was further along than all the other women who died on the island before their third trimester. Also, where did Juliet get her mechanics skills? She can really do just about anything, can't she?

Miles is also Dharma security, Amy goes into labor

We see Sawyer (Jim LaFleur) retrieve Miles from his home in the barracks. Miles is also wearing Dharma jumpsuit and is a security officer. They go a retrieve Horace who is passed out next to the pylons near The Flame Station. Sawyer takes him home to his wife Amy who is pregnant. She says that she and Horace got into a fight about her dead husband Paul. Amy then goes into labor and Sawyer looks panicked.

Sawyer is LaFleur, Horace blows up a tree

Three years later, in 1977, we see a girl (Rosie) and a Dharma security officer (Jerry) dancing to the song "Candida" by Tony Orlando and Daw from the album Candida. They are in a room with a bank of security monitors and another security officer (Phil) comes in a reprimands Jerry for neglecting his job. That's when Rosie notices someone on one of the monitors. It's Horace Goodspeed drinking and lighting dynamite out by the pylons (security fence). After Horace blows up a tree and they kick Rosie out of the room. Jerry and Phil discuss whether or not they should wake LaFleur, and they decide that they have to. They run through the barracks and knock on one of the doors. It turns out that Sawyer is LaFleur and he puts on his Dharma jumpsuit which lists his title as "Head of Security."