1994, Miami: Gianni Versace and Antonio D'Amico are in a hospital. Versace confesses to a nurse his fears of dying and recalls the death of a sibling in his childhood. The allusions to AIDS here are not subtle, but a certain poetry is created by using silence around the disease itself — a silence characteristic of that time period. Back at the mansion, Donatella wonders what will become of Versace (the brand) without Gianni.
Donatella confronts D'Amico, implying Versace's condition is his fault and blaming the excesses of their lifestyle on Versace's downfall.
Back to 1997 where fans of Versace are putting flowers on the footsteps of his mansion in his memory, shortly after his murder. D'Amico and Donatella's feud continues, with the latter telling the former, "There's no need for us to pretend anymore."
Before the murder of Versace: Cunanan is seen stealing license plates. His mood is elevated as he drives in a red pickup truck, once again demonstrating his disconectedness from his crimes (we get it, Ryan Murphy).
Cunanan checks into a hotel with a fake passport. He's running out of money but begins looking for drugs anyway. He meets a dealer at the hotel and the two discuss "being sick" — Cunanan claims he worked in an AIDS clinic and has recently lost his best friend and lover. He then goes on to claim Versace had proposed to him in the past. Clearly Cunanan's life story is pieced together from both lies and truths, and the extent to which he's even able to separate out which is which is questionable. He claims he could have been a great designer, too.
Police, meanwhile, are hunting for Cunanan in connection with other murders. Their commitment to the hunt is lackadaisical at best.
On South Beach, it doesn't take long for Cunanan to find an older man to take him home. The two engage in some heavy BDSM while Cunanan expounds on his wealthy upbringing. His John considers calling the police after the scene gets too intense, but decides against it while staring at the ring on his finger.
Donatella and Gianni argue about design philosophy at a fashion show. American Crime Story's limits reveal themselves here: the recreation of Versace's looks and presentation (considering the actual house of Versace has disapproved of the TV series) looks impressively cheap and half-assed. The audience within the show claps adoringly at each outfit: hard to suspend disbelief here.
Anyway, Dontatella wonders: will Versace change his brand to reflect the times now that he does not feel conquered by his disease?
Later, D'Amico tells Versace he wants to get married and Versace demures: "You can say it in the morning, but can you say it in the evening?"
With Cunanan's drug habit getting worse and whatever plaguing his mind deteriorating, he visits a gay club. He's having some kind of manic fit, unsure of who he is. Credits roll over his confusion.
Murphy once again sets up a dichotomy between seriousness and camp, but the weight is heavier on the former aesthetic. He's addressing real issues in gay life in the 90's: both the lavish opulence in spite of crippling disease and the pitiable world of sex work and drug dealing. The two are contrasted sharply with each other throughout the episode: scenes of Versace's over-stylized palace are contrasted sharply with Cunanan's flop house. Murphy's trying to capture something specific to that time period, and his delicacy around the AIDS crisis (mentioned only in the show's parentheticals) is perhaps the most subtlety he's ever shown. A thesis statement for his Versace series hasn't quite yet emerged, but the players have been established and the scenes are set: what he does with the show from here is anyone's guess.