The first episode left off with Detectives Guidry and Bowen getting a call from the lab confirming that Ethan's DNA was discovered beneath Adam's fingernails, instantly making him the prime suspect in the murder. However, the second episode of the series doesn't pick up right where the last episode left off. Instead, it opens with a flashback to a moment in Chloe and Nicky's childhood that was quite traumatic for Chloe. Here's an extensive recap of what happens throughout the episode.
Spoilers are ahead from The Better Sister episode 2!

Could Ethan be guilty in The Better Sister?
In short, the flashback shows a young Chloe and Nicky camping by the lake with their dad, when Chloe nearly drowns but is saved by their father. The episode then cuts to the present time, where Chloe prepares to leave the house to meet with Catherine's cybersecurity expert regarding the numerous mean posts she has been receiving on the internet. Meanwhile, Guidry and Bowen speak with their captain about what they've discovered concerning Adam's murder case.
In this scene, we also learn that the explicit DVD that was sent to Chloe was from a woman named Karen Domenco. Guidry and Bowen then decide to pursue a search warrant for Chloe's penthouse. They're hoping to locate the missing valuables from Ethan's room at the summer house in the penthouse. Having already found Ethan's DNA under Adam's fingernails, they're now focused on him as the prime suspect. They just need enough evidence to make the case stick.
Jake arrives at the police station for questioning about his whereabouts on the day of Adam's murder, and by the end, Guidry and Bowen come to the conclusion that he and Adam were not as close as they appeared to be. Guidry even makes the comment that Jake hated Adam. Now, he's become another suspect on their list, but Ethan still remains their primary focus.
Before Chloe meets with the cybersecurity expert, the episode shifts to a flashback showing the early days before Chloe and Adam got together. Adam expresses his gratitude to Chloe for signing some mysterious papers. We learn later in the episode, through another flashback, that those documents were to admit Nicky into a psychiatric ward temporarily.
Nicky was spiraling out of control due to a drug and alcohol addiction, and after Adam found her and a young Ethan unconscious in the pool, he knew that something had to be done before things got worse. This prompted him to ask Chloe for help in getting a psych hold on her. Back in the present time, Chloe learns from her conversation with the cybersecurity expert that someone at her workplace is behind some of the online threats she has been receiving.
Now, we're taken to The Real Thing magazine. Chloe talks with Catherine, who advises her that the best course of action right now is to consult with her team given everything that’s happened. During their discussion, it becomes clear that Catherine has no idea Nicky is Ethan’s biological mother. In the same scene, Chloe discovers a Lyft receipt from two days prior showing a charge to her card for a ride from Manhattan to Queens.
It’s evident she didn’t take the trip, and we later discover that it was Adam who used the Lyft. Chloe asks Bill for help in figuring out what Adam was up to, and he agrees to be of assistance. However, her meeting with him is cut short when she receives a call from Arty telling her that Guidry and Bowen are at her penthouse.
She gets home and talks with Guidry and Bowen, who start questioning her about a previous incident where Ethan brought a gun to school. Sitting next to her, Nicky is visibly shocked, having been completely unaware of the event. Chloe tells the detectives that the incident is unrelated to the current case and mentions that she actually has possible evidence, the Lyft receipt.
At that moment, Nicky appears noticeably anxious. After Ethan walks into the room, Nicky tells Guidry and Bowen that they need to leave. But before they depart, Guidry informs them that Ethan's DNA was found under Adam's fingernails. Chloe and Nicky start arguing before Chloe calls Jake and requests a criminal lawyer for Ethan.
With a search warrant in hand, Guidry and Bowen return to the penthouse accompanied by additional officers to conduct a thorough search. Ethan’s criminal lawyer, Michelle Sanders, arrives just in time. While speaking inside Adam’s office, Sanders explains to Chloe, Nicky, and Ethan that the police are searching for evidence to pin a suspect and that they possess information they're not aware of.
Ethan then comes clean and admits he suspects Kevin may have told the police he wasn’t with him on the night of Adam’s murder, contradicting the alibi he previously gave. Chloe and Nicky begin arguing once more, but Sanders interrupts and tells them to step outside while she talks with Ethan.
Sanders tells Ethan that she will do everything she can to help him, but he must not speak to the authorities without her present. Ethan agrees to follow her advice. Guidry soon arrives and informs Chloe, Nicky, Sanders, and Ethan that the search is complete and they can return to the living room. Once there, Guidry reveals that all the missing valuables from the summer house were found hidden in Ethan’s room, with one of his shoes even stained with blood.
As the police handcuff Ethan, Guidry accuses him of taking those items after murdering Adam, attempting to stage the scene as a robbery. Ethan is then officially arrested for Adam’s murder and led away by police. The episode ends with Chloe and Nicky watching as Ethan is placed in the back of a squad car.
The Better Sister is streaming now only on Prime Video.