At Wolfram & Hart, Harmony tells Angel that there was a mix-up with a girl named Dana's medication at a psychiatric hospital, and no longer sedated, she broke down her door, killed several people, and escaped. At the hospital, Dr. Rabinaw tells Angel and Spike that Dana had been kidnapped and tortured for months when she was ten, by the man who killed her family. Recently, she gained incredible strength. Angel realizes Dana - like Buffy - is a vampire Slayer, activated by the events in the BtVS series finale.
As Spike heads off to look for Dana, Angel follows Lorne's suggestion to visit Dana's childhood home with a psychic. The psychic flashes back to Dana’s abduction and her family’s murder; the smell of molasses and a basement is "where her pain lives,” he says. Meanwhile, Dana goes to the basement of the building where she was held captive, flashing back to her torturer injecting her with various drugs.
When Spike follows the scent of blood into Dana's trap, Andrew tries to unsuccessfully shoot Dana with a tranquilizer gun. Spike chases Dana to the basement, where she starts repeating what her torturer once said to her. Dana, channeling Nikki, recognizes Spike as William the Bloody. Before he can explain that she’s dreaming of other Slayers, she injects him with a sedative. At Wolfram & Hart, Angel and Gunn realize the smell of molasses indicates Dana was held in a distillery, and send a tactical team to search abandoned distilleries.
Back in the basement, Spike awakens to discover that Dana has cut off his hands. She tells Spike he can’t hurt her anymore, but when he insists she’s thinking of someone else she finally remembers who her torturer really was. Angel arrives, tells Dana her real torturer is dead, and knocks her out with a tranquilizer dart. Spike is taken to the hospital to have his hands reattached. Later, Andrew tells Angel because Dana is a Slayer, she belongs in the care of the new Council. -fr. Angel season 5 "Damage" summary, wikipedia.