Basket opens on the plateau, which is now "established, at least in terms of torches." A pig wanders up to say hello. "This is my new neighbor. He doesn't have a name because he'll probably die." The desert is on one side and the Extreme Hills on the other, with "my cool cave I have to explore." The real problem is the inventory: "I have too much stuff." So the first job is somewhere to put it.
Function first
Basket flattens a patch of ground in the middle and starts a small cobblestone building. "Eventually I'll make it a little bit prettier but for now we'll go with function." It doesn't need to be big, just a place to store things. Cobblestone turns out to be short, "just because I was trying to keep everything else," but there's just enough for the walls. The roof goes on in oak planks. "So spiders can still get in and stuff," Basket admits, "but for now this will work." Windows can come later, and there's "plenty of sand to make plenty of glass."
Moving in
Inside go torches, a door, furnaces, a crafting table and a double chest. The pig gets in too. "How'd you get in here?" Basket sets pork cooking and unloads the "monster loot." There's a bed in there too. Some sticks left outside earlier have despawned, so Basket marks off a tree area instead and plans to keep the plateau "self-sustaining, at least to a degree," maybe trimming back the spots where anything could climb up.
A plan for diamonds
There's no water up top except one bucket, and the only other water nearby feeds a waterfall. "That'll ruin the waterfall if I take that." Basket finds lots of caves around the edges, and has a plan for getting deeper: "a ladder straight down a mineshaft, down to diamond level," built "in a safer manner" this time. Then a happy verdict on the spot: "I like this place. I'm very excited about this."
Wheat and axes
Night falls, and Basket tills a square of ground with a stone hoe around a single block of water, then covers the water with a dirt block and a torch "so I don't fall in." Only plain seeds go in for now. "Looks like I'm pretty well established." Next comes a chest by the tree area for saplings, stocked with freshly made iron axes so Basket can "just pull straight from there" when chopping. A skeleton turns up on the plateau, and Basket goes after it and lights up the dark patch it came from. "Any other bad guys? I don't see any."
Flint and arrows
Basket wants more arrows, which means flint. That means gravel placed on the floor of the house and broken, over and over, until there's "a bunch of flint." Some flint gets saved for later, for a flint and steel "to get into the Nether." The rest becomes arrows, and then too many arrows. "Now I have too many arrows."
Sugar cane in the rain
It starts to rain. Basket plants sugar cane all the way around the little pond, adds a chest by the farm to hold the hoe, and notes the saplings are already growing. There are plans for later: cows, "or at least a pasture down below," and chickens with "sort of an automated chicken system using hoppers and water." Basket also wishes the mineshaft had turned up a chest or two, since that might have meant melons.
The episode ends with Basket alive on the plateau, in the rain, about to cut some wood and replant it off camera, "because we're in a pretty safe spot."