[1] The episode was notable for the controversial appearance of a UFO during its climax, which served as a culmination of numerous UFO-related references recurring throughout the season.
When Ed reveals his upcoming rendezvous with Milligan at Sioux Falls, State Police Captain Cheney hatches a dangerous scheme for him and Peggy to wear a wire for the meeting.
Meanwhile, Lou stops at the gas station to call home, unaware his wife has collapsed, then discovers that Hanzee killed the attendant.
"The Castle" opens with the depiction of a fictional book titled "The History of True Crime in the Midwest," in which the events of both the film and the series are suggested to take place.
In the season 1 episode "A Fox, a Rabbit, and a Cabbage," Lou Solverson recounts to Lorne Malvo a case he encountered in 1979:[3] The season 2 premiere "Waiting for Dutch" opens with a scene depicting the filming of a fictional film titled "Massacre at Sioux Falls," in which an actor portraying a Native American waits for Ronald Reagan to arrive on set.
Prior to the episode, commentators drew attention to a real-life homicide that occurred at Sioux Falls in 1973, in which three men impersonating police officers shot and killed four male teenagers, while a fifth victim claimed to have been sexually assaulted by one of the perpetrators.
[4] The episode's telling of the events bears little resemblance to the 1973 crime, and instead depicts a massive shootout at the fictional Motor Hotel between the South Dakota State Police, members of the Gerhardt family, Lou, Hank, and Hanzee Dent.
Hawley told Entertainment Weekly that the Sioux Falls massacre was decided as a plot point early in the production of the second season, and that the intention was to subvert audience expectations of which characters would play key roles.
Before the episode, the season had included numerous references to UFOs to reflect the popularity of conspiracy theories in the 1970s, though most were vague or subtly placed in the background.
It also receives direct acknowledgment twice: once when Peggy tells Ed that it's "just a flying saucer" and that they have to leave, and again in the season finale "Palindrome" when Lou admits that his police report would be considered implausible if he were to mention being saved by a "spacecraft."
[6] Hawley elaborated on the scene in interviews and explained some of its influences, which included the Coen brothers' 2002 film The Man Who Wasn't There as well as the real-life 1979 Val Johnson incident in which a Minnesota deputy sheriff claimed to have encountered a UFO.
Hawley stated that the idea of "accept[ing] the mystery," which he called a "staple of the Coen Bros. philosophy in their films," guided his decision to include a UFO in Fargo.
He felt that all the events of the season leading up to the episode demonstrated that "Hawley has, beneath all the artifice he delights in putting on (and which makes the show such a pleasure to watch), a good grasp on the vagaries of human behavior."
Handlen also praised the inclusion of the UFO as consistent with the rest of the season's storytelling, saying: "Everything here makes sense, more or less, but it’s also bizarre and loopy and easily preventabl[e], and it cost people their lives.
"[10] Ben Travers of Indiewire felt that the UFO functioned as a metaphor for an "all-knowing force from above looking down in judgment" at the series' events, and that the use of aliens (as opposed to God) conveyed this theme more fittingly as it "represented the paranoia of the post-Vietnam era."
Additionally, Travers considered the acknowledgment within the episode of Hanzee Dent's mysterious motives signified the writers themselves "pleading ignorance via a less than omniscient narrator," though he felt that the decision not to speak for a Native American character was "respectful to a point of view undoubtedly foreign to any white man."