As soon as he goes into the loop the next morning, Jacob has a conversation with Miss Peregrine. She warns him against discussing the future with these children from the past because if they were to leave this loop and go to the future, they would age instantaneously and die in a matter of hours. Later that morning Jacob meets Enoch, a boy who creates little clay soldiers that can actually move, called homunculi. His skill is taking life from one thing and giving it to another, and he shows Jacob the mouse heart that he put in the soldier to make it move. He asks Jacob if he will be staying with them on the island, and then tells him that some things here are not as great as they seem. He tells him to go upstairs to meet his friend Victor if he wants proof.
Victor is dead, but Enoch's ability allows him to rouse him for brief talks. Enoch refuses to tell him how Victor died, but he does tell him about Raid the Village, a game they play where they wreak havoc on town and destroy things because the loop will reset it all the next day. Wondering how Victor died, Jacob wanders out of his room and finds Emma's, noticing a tied-up box marked "private." Curious, Jacob unties the string and finds nearly a hundred letters from his grandfather. He goes through the letters and pictures that they sent each other, but then Emma walks in, furious at him for snooping.
She says he could have just asked her if he wanted to know about her and Abe, and then tells him how his grandfather told her he loved her and would come back for her one day, but never did, and found another woman—Jacob's grandmother—to be with instead. Jacob realizes that it is not him she likes; he is merely a stand-in for his grandfather. Emma moves in to kiss him, but he cannot handle this idea so he suggests that there is something going on between her and Enoch. He also demands to know what happened to Victor, sure that there is something going on here that no one is telling him. She tells him to meet her later that night and she will tell him.
Jacob goes back to the future for a while and talks to his father, who is upset because another birdwatcher has shown up on the island, which threatens his plans to write an innovative new book about the bird species here. The birdwatcher walks into the pub, wearing dark glasses, and immediately seems like a questionable figure. His father falls asleep immediately that night and Jacob sneaks out to meet Emma. She throws him a snorkel mask and tells him they're going to swim somewhere before they talk, and then she leads him to a shipwreck, where they breathe through a tube she and the others have built that leads up to the surface. They explore for a while, with Jacob mesmerized, before going back to the surface to sit on the ship's hull and talk.
They begin kissing, which Jacob promised himself he would not do. Emma asks him to stay there with them, but Jacob says he cannot, because he is not like them. She tells him he must be peculiar because common people cannot pass through time loops. She explains at last what his grandfather's rare talent was—seeing the monsters. Jacob remembers the being that killed his grandfather and realizes that he can see them too.
Emma continues to explain, telling Jacob that the monsters cannot enter time loops, which is why they are safe on the island. Victor died when he got fed up with the island, tried to leave, and was killed by monsters—she calls them "hollows." Jacob tells her that it was hollows that killed Abe too. They sit together on the ship for a while until suddenly Hugh and Fiona appear, paddling towards them in the water, telling them to come because something is terribly wrong.
Miss Avocet, one of Miss Peregrine's ymbryne friends, has come, looking frail and weak. While they fix up a bed for her, Jacob gets angry at Miss Peregrine for not telling him straight away about the monsters and his peculiarity. He also wonders why his grandfather waited so long to tell him, and assumes he wanted to protect him. Miss Avocet comes to and says she came to warn Miss Peregrine because a pair of wights came into her loop in the dead of night disguised as council members. Miss Bunting, her partner in running the school, was abducted, just like Miss Wren and Miss Treecreeper were in their own loops. They are taking ymbynes for some reason, so Miss Peregrine must be careful and be ready.
Miss Peregrine sends all the children to bed, but Jacob forces her to sit down with him and explain everything she knows about the monsters. She explains that some time ago, a faction of peculiars who believed that they could use time loops to reverse aging and create immortality emerged. Her own two brothers were in on it, and they, other members of the faction, and traitor ymbynes conducted an experiment that ended in a terrible explosion. Everyone had assumed they were killed, but they actually survived in the form of damned creatures called hollowgasts. No one knows for sure how it happened, but they believe they reversed-aged themselves so far back that their souls had not yet been conceived, so they are soulless monsters.
The only hope for some salvation for hollows is to gorge themselves on peculiar blood because a hollow who eats enough peculiars becomes a wight, or a creature somewhere in between human and monster. Wights are servants to hollows, scouting out peculiars for them, and their defining feature is the lack of pupils in their eyes. Jacob remembers seeing the neighbor he thought was blind near his grandfather's house, and realizes he was a wight. He wonders if the new birdwatcher on the island could be a wight, Miss Peregrine is worried that a wight followed Jacob to the island, after knowing about his grandfather.
Throughout this novel, physical evidence has become an important source for Jacob as he tries to piece his grandfather's story together. First it was the photographs, both the ones his grandfather used to show him and the ones he found in the trunk in the abandoned house. But letters are becoming important now, as well—it was the letter that he found in the Emerson book that led Jacob to Cairnholm, and now he finds letters that tell him the story of his grandfather's relationship with Emma. These essential objects, photographs and letters, pave the way for later conversations that reveal the truth to Jacob at last.
The letters also confirm the conflict between Emma's past relationship with Abe and her feelings for Jacob now. Both Emma and Jacob are in a difficult position, Emma as she battles with trying to figure out whether she truly has feelings for Jacob himself, and Jacob as he attempts to decide whether to act on his feelings for Emma, knowing about her past with his grandfather. This potential relationship transcends time, and Emma and Jacob must work to understand it the same way they must understand the fluid, complex entity that is time itself.
In these chapters, Jacob learns the last piece of the overarching mystery: there are monsters who seek to kill peculiars, and even more, he is a peculiar himself. This realization confirms all of Jacob's feelings of isolation and lack of belonging that he felt growing up. He actually is different, and he has at last found the place that he fits in. This marks the moment that he is fully accepted into this world, the safe haven that Miss Peregrine has created. This means that when this world is threatened—as Miss Avocet reveals it has been—Jacob will fight even harder to protect it.
Immortality is a central theme of these chapters, starting with the revelation of Enoch's skill and the way he uses it on Victor. Though peculiars are technically mortal, they use many different tactics to transcend their mortality. Miss Peregrine is able to create a loop to halt time at one spot, and she cheated the inevitable death that would've befallen them when the bomb hit. Even though Victor is technically dead, Enoch is able to take life from something else and put it into him. Finally, the faction of traitor ymbynes and other peculiars who sought to manipulate time loops to make them immortal also sought to beat their mortality, but they were punished for it, suggesting that death is not something that is meant to be messed with.
A theme of greed also permeates these chapters, with characters constantly wanting what they cannot have. Miss Peregrine warns against this sort of greed when she tells Jacob not to tell the children about the future. She does not want them to get caught up in wanting something that they will never have, and one of her primary teachings is contentment with the present moment. In the same way, the peculiars who sought to manipulate time wanted something they could not have: immortality. This novel cautions that this kind of greed can be extremely dangerous.