Penny happens to be on the same street ("Caring Hands"), and appears asking him to sign a petition to turn a condemned city building into a homeless shelter. However, the remote requires his attention, and he appears uninterested in her and her cause. As Penny leaves, Horrible is conflicted, but opts to steal the wonderflonium, telling himself that 'A man's gotta do what a man's gotta do' ("A Man's Gotta Do"). As Horrible remotely drives the van away, Captain Hammer appears and takes over Horrible's song, smashing the remote control receiver and inadvertently causing the van to veer towards Penny. Hammer pushes her out of the way (into a pile of garbage) just as Horrible regains control of the van and stops it, making it appear that Captain Hammer stopped the van with his bare hands. The two confront each other, with Hammer repeatedly slamming Horrible's head on the van's hood, but Penny emerges to thank Hammer, making him forget about beating up Dr. Horrible. As Hammer and Penny serenade each other, Horrible jealously glares at them while he makes off with the wonderflonium. Horrible stalks Penny and Captain Hammer on their dates; Horrible sings of the misery of the human condition, and Penny sings of hope and the possibility of redemption ("My Eyes"). Penny and Horrible, known to her as Billy, begin to talk openly as friends. On his blog, Horrible reveals that his Freeze Ray has been completed, and that he plans to use it the next day. The following post reveals that he has failed, as Hammer and the LAPD watch his blog, and they were ready for him with Hammer giving him a black eye. He then receives a phone call from Bad Horse and is reprimanded, saying that the only way to be inducted now is to commit an assassination ("Bad Horse Chorus (Reprise)"). Horrible is conflicted and can't decide on a victim, or even if he wants to commit a murder at all, even though the League will deny his application if he doesn't. Billy chats with Penny over frozen yogurt, at the laundromat, about his problems ("Penny's Song"). As they grow closer, Penny mentions that Captain Hammer is planning to drop by. Billy panics and tries to leave, only to run into Hammer as he walks in. They feign ignorance on recognizing each other, but when Penny leaves them alone, Hammer reveals that he recognizes Billy as Dr. Horrible.