Enchanted Past. Red is a wolf. Her pack finds (or you know, kidnaps) her. Her mommy isn't dead. She's just Annabeth Gish (who is way too young to play Red's mom, but I digress). Momma and the other wolves (including cutie Quinn) want to teach Red how to control her lupine tendencies, such that she can transform at will, and remember her transformation, without gobbling up half the town. It all goes pretty well until Snow White infiltrates their den. The wolves don't trust the humans, so they're ready to kill the fairest in the land. Red loves Snow, though, so she rejects their evil plan. Anita (Red's mom) ends up dead (as does Quinn). Snow and Red decide they're family. Isn't it romantic?
Storybrooke. King George (Charles Widmore) is still out to break Charming, for his failure to pretend he is his late twin James, marry Abigail, and otherwise give up his life to the monarch. So, he (Widmore) brutally murders Billy (the tow truck driver from season 1, who is Cinderelly's Gus-Gus, which just breaks my heart) and frames Red for it, because it's a full moon, and all. Charming knows Red is the real deal, and with Granny's help, he proves our toothy girl's innocence.
Meanwhile, Henry has another nightmare. It's certainly Aurora who is in the corner opposite his, but the fire is so hot and bright that when our boy wakes in Storybrooke, his hand is burnt. Since Charming is working the Red case, Regina takes babysitting duty. When her son wakes up burnt, she drags him to Rumpy, who confirms the boy is spending sleepy-time in another dimension. Rumpy can't stop the dreams, but he can (and does) give Henry a pendant filled with a potion which will allow the boy to be proactive in his own dreams.
Also, Grumpy and his brothers discover diamonds underneath Storybrooke, but it isn't like if we discovered diamonds. They're in it for the magic, not the riches. Dopey, indeed.
The important parts? In the Enchanted Past, Snow never loses faith in Red. In the Storybrooke present, Charming never loses faith in Red. Also, hotties are unnecessarily slaughtered, which means Kitsis and Horowitz are due for another trip to the woodshed. And finally, Belle is a true friend to Red, for no reason other than friendship.