New alliances are formed in this episode:

• Chris and Snoop offer Michael an alliance and a chance to join the Stanfield organization
• Prop Joe offers Marlo a position in the Co-Op
• Carcetti promises Valchek a promotion if he is elected in return for Valchek continuing to leak info about the BPD
• Delegate Watkins breaks off his alliance with Mayor Royce and begins to support Carcetti
• When Rawls realizes Carcetti has a shot in the upcoming election he offers his support, making himself an important ally to Carcetti

This refers to the actual grades the students get on the state-wide exam that has been alluded to for most of this season, as well as the final evaluation of characters and programs introduced this season:

• Chris and Snoop decide Michael has passed all of the tests necessary to become their protege
• The city decides not to approve Colvin and Parenti’s “corner kid” classrooms, as it goes against their “no child left behind” policy
• Bodie’s actions before his death allow us to make a final judgement on him – surely everyone would agree he was a soldier til the very end
• The crime “stats” at the end of the season are attributed to Royce rather than Carcetti, and serve as the final judgement of the Royce administration – safe to say its grades weren’t very good

Namond says this one the first day of school, as he feels that students and teachers are both friendlier before the daily grind of school puts them in a bad mood.

This also foreshadows how the four corner boys – Michael, Namond, Randy, and Dukie – are introduced as innocent this season, but 3 of the 4 become hardened by the end of the series as the day-to-day actions of the street take a toll on them.

McNulty says this to Bodie, hinting that he feels Officer Walker got what he deserved when he was robbed and got paint dumped on him by Michael, Namond, Randy, and Dukie. Walker had been known to antagonize the corner boys, whereas McNulty has some respect for and understanding of them, so he isn’t exactly sympathetic when he hears they took revenge on him.

https://www.youtube.com/watch?v=tJi8kAIumXs&feature=kp

This applies to multiple other characters in the show whose dangerous decisions come back to haunt them. Daniels is one of the few good cops in the unit, but is eventually hamstrung by whatever illegal activity he and his wife did in Atlantic City. Omar eventually gets killed for playing in a lot of dirt during his stick-up career. Prop Joe brings on the wrath of Omar by inviting Marlo into the Co-Op. And McNulty himself (along with Freamon) eventually loses his job as homicide detective for playing in dirt and getting caught doing it.

Bubbles says this when buying the “hot shots” intended to kill the man who has been continually robbing and beating on him. The dealer tells him that all he has to do is convince the tormentor that the poison is actually dope, and his problem will be taken care of. But things end up going horrifically wrong when Sherrod mistakes the hot shots for heroin, shoots up, and kills himself.

This speaks to the lack of easy solutions in The Wire. Most people assume there is some simple solution as to how to fix Baltimore – elect Carcetti over Royce, promote good police like Daniels, etc. – but it becomes abundantly clear that there is no quick fix for a city this broken.

Mayor Royce says this in reference to “Hamsterdam”. He hopes to find a middle ground where he can continue to reap the benefits of only having one drug zone in the Western, while at the same time protecting himself from being known as “the mayor who legalized heroin”

It also refers to the unlikely alliance formed between Omar and Mouzone, who come together to take out Stringer even after Omar almost murdered Mouzone.

Multiple lessons are learned in this episode:

• The most memorable is taught by Omar, when he reminds Wee-Bey and Stinkum that if you come at the king you best not miss
• Lester teaches Kima how to choose the dancer for Orlando’s that is most likely to flip on the Barksdale organization
• Wallace teaches math to a young kid by comparing it to keeping count in the street
• Kima learns she may have made a mistake in basing so much of her case on Omar’s testimony, since he has been committing murders and could easily be ruled as an unreliable witness

https://www.youtube.com/watch?v=WP-lrftLQaQ

The writers took it easy on us here – this only refers to the pagers that the Barksdale organization uses and D'Angelo’s pager that Major Crimes clones. This is the episode where Prez breaks the code being sent via pager, helping the unit get closer to learning more about Avon.

“Soft eyes” are brought up without explanation in this episode, when another teacher tells Prez he needs soft eyes in order to teach at an inner city school.

We later learn the meaning of soft eyes in “Refugees”, when Kima is working her first day of homicide. Bunk explains that having soft eyes means you are able to pick out the little details in a crime scene that most people would miss. This is a useful attribute for both homicide police and teachers that are in over their head.

Kima says this while telling a story to her partner and friends about the moment she realized she wanted to be a cop. After working a difficult case on her own, a high-ranking officer recognized her effort, and dropped the handcuffs down to her so that she could make the arrest on her own.

This is important because Kima gets shot in this episode, and almost has to put an end to her career as a murder police right after reminiscing on how much it means to her.