The Nightmare Express passes through the repair portal with all its cars and arrives at Station and Repair Hub E, a vast underground rail yard filled with thousands of ghoul-like creatures. Carl realizes the fence holding back the horde is close to collapse, and the train is automatically routed into a dead-end service bay beside a giant turntable. When a pair of talking, bark-skinned monsters appear, Carl learns from their description that these are Festering Ghouls: victims of vitamin-shot withdrawal who died and transformed into a new life-form driven to feed and gather.

As the group debates how the ghouls reached the yard, a gremlin train technician named Widget arrives from a nearby tower by chain basket. Widget explains that the yard is overwhelmed because the ghoul-processing system is broken, and he also reveals that Carl could have reached stairwell stations more easily by taking other lines such as the Escape Velocity. He agrees to help unhook the damaged cars and guide the engine onto an employee line, but just after arranging the plan, he is suddenly killed by a spider ghoul that revives after seeming dead.

With Widget gone, Carl, Donut, and Katia decide to continue alone. Donut climbs the chain to the tower, searches through Widget’s unlabeled controls, and after a few mistakes successfully rotates the turntable into alignment with the Nightmare’s rails. Carl pulls the engine forward while Katia keeps climbing ghouls away from the windows, and Donut accidentally opens the yard gate as well. Donut then uses Puddle Jumper to return, and the group steams out through the main doors into the area beyond the yard.

Outside, Carl sees the Iron Tangle Substation E burning and watches ghouls attack dwarven workers and porters who are still materializing at the site. A human NPC named Madison, an Iron Tangle human-resources associate, runs from the fire and is rescued after Donut blasts away a flaming wolf ghoul. Carl takes the train down the employee line past closely spaced station entrances, planning to inspect Station 24 and later head toward 60. While questioning Madison, Carl realizes her memories of Yard A and executive housing are inconsistent, suggesting the NPCs were given shallow false backstories. Madison then reveals a crucial danger: Terminus stations contain six Station Mimics that are fed passengers, and workers are instructed to direct customers there, prompting Carl to send Bautista an urgent warning not to disembark at Terminus.