Quick recap
Hidden in the trunk, the Baudelaires reach Caligari Carnival and disguise themselves as freak show acts. The carnival's fortune-teller, Madame Lulu, is Olivia, a V.F.D. member who tells people what they want to hear. Olaf and his troupe stage a show in which someone will be fed to the lions. In the chaos, the troupe's bald man and Madame Lulu fall into the pit and die. Olaf burns the carnival and invites the "freaks" on a trip to the Mortmain Mountains. On the road, he reveals Lulu had already told him who they were and keeps Sunny. The new henchmen cut the caravan's rope, and it rolls down the slope with Violet and Klaus inside.

