Along with the Pilot and the Red room dream, the Season 2 opener is probably the series most well known episode. It introduces the Giant, another mysterious being that inhabits the town but one unlike BOB and MIKE is more outwardly helpful to Cooper.
The Giant gives Cooper three cryptic statements, even more cryptic is the reason for these statements. "If I tell them to you, and they come true, then will you believe me?" Strangely puzzling reason, not "These will lead you to the truth/killer/whatever" just, if these things come true you will believe me yes?
The giant's second statement is one of the most famous lines from the whole show "The Owls are not what they seem", furthering the Log Lady's warnings about Owls. His first statement however is an interesting one "There is a man in a smiling bag", not as well remembered but a long running bit of symbolism for Lynch. Apparently whilst he was shooting Eraserhead (I actually can't find the interview at the moment, this idea may even proceed his first feature) Lynch was living across from a morgue and would see the workers hang the body bags out to dry after washing them. He noted that the bags appeared to "smile" when they were hung out. In this case it refers to Jacques, whose body bag Cooper sees hanging in the Hospital.
You would almost forget that this is the followup to a pretty major cliffhanger, but the Giant sequence is intriguing enough to keep you watching. You almost forget that several characters are currently in very real danger. This is caught up as Cooper gets to Hospital, in a fairly clever use of Lucy by Frost as screenwriter. Normally, in most shows, when a character drops huge blocks of exposition dialogue in a scene it can be jarring or even annoying. Not when Lucy does it, as they have spent a whole season establishing that Lucy is just the sort of person to in detail explain what has happened in the proceeding 12 hours to anyone who asks. She is pedantic, a little annoying and her "catch up" to Cooper is absolutely perfect and in character.
But I want to skip to the end, possibly the scariest fucking sequence in the series. Ronette's dream is a short but incredible sequence, dark, mesmerising and full of astounding visuals. Above all it articulately instills in the viewer what it is like to be terrified and helplessly watching a psychopath kill someone in a train carriage. Of the two versions of Laura's murder we see on Screen (this and Fire walk with me) this is still the most haunting to me but only by a fine margin. This makes even Laura, the victim, seem terrifying to us almost a part of the grizzly ritual Ronette is witnessing. The Episode ends with BOB laughing and screaming into the night in a terrifyingly distorted voice, triumphant after killing Laura.