Written by Tim Minear and directed by David Semel, it was originally broadcast on October 3, 2000, on the WB network.
As the House Un-American Activities Committee hearings blare on a TV, Angel strolls through the lobby and the manager turns away an African-American family, telling them that (despite what their sign says) the hotel has no vacancies.
Upstairs, when Angel comments on Judy's agitation, she confesses the man banging on the door was a PI sent by the bank from which she stole money.
As Angel stashes Judy's bag of money in the basement, he hears whispering and realizes something in the hotel is making people paranoid.
In the present, Cordelia and Wesley find newspaper reports of the bellhop's execution for the salesman's murder, and an article about Judy with the headline, "Search Called Off — Fugitive Woman Believed Dead."
He contacts the others, announcing the hotel hosts a Thesulac demon that whispers to its victims, then feeds on their insecurities.
In 1952, Angel returns from a bookstore where he has learned the ritual to corporealize the demon; meanwhile, the PI reveals Judy's secret.
On the stairs, the Thesulac demon becomes corporeal, gloating about the paranoia he just fed on; Judy's despair is particularly delicious as she had just come to start to have faith in humanity again due to Angel's friendship and help.
In the present, Cordelia, Wesley, and Gunn arrive at the Hyperion and, after performing the spell to make the Thesulac corporeal, Angel electrocutes it with the exposed wires of the fuse box.
The hysteria provoked by the paranoia demon mirrors the fears of communism surrounding LA's entertainment community, the fear of being revealed as gay by a well-known actor who arranges furtive liaisons at the hotel, the racism that caused an African American family to be turned away from the hotel, the racism that led to Judy's firing and rejection by family, friends, and fiancé, and the lynch mob that attacked Angel.
This both captures the connection between anti-communism and racist policing, and serves as direct comment on the perpetuation of past prejudices and relevance to recent events.
Production designer Stuart Blatt explains that after blowing up Angel's cramped office in the season one finale, he had the opportunity to create a bigger, more "film-friendly" set that the crew and cameras could move through freely.
[5] The Los Altos was home to many Hollywood celebrities — including Bette Davis, Mae West, and William Randolph Hearst — before the Great Depression,[6] similar to the fictional history of the Hyperion featured in this episode.
Club, thought director David Semel "evokes classic retro-L.A. movies like Chinatown and Barton Fink and L.A.
"[10] Writer Tim Minear says that, although he generally prefers the season-long story arcs to the movie-of-the-week, this episode "rang his inner gong."