Mulder's muleheadedness into putting his nose in top secret affairs gets him into trouble. After a UFO crashes, the military hunts down an invisible and radioactive survivor. Mulder meets UFO addict Max Fenig who proves to be a multiple abductee. The alien entity ends up being rescued by another UFO, taking Max with it. The X-Files are in serious danger of being shot down, but Deep Throat lobbies into saving them.
We find out later on that the Black Oil has the ability to generate radioactivity (3X15: Piper Maru). What we won't see again is an invisible alien, as it's shown here. Of course the producers didn't think these would be the ETs later represented by small humanoid greys, hence the fast camera movements and distorted image of the ET's point of view. We see the aliens do have cloaking technology (7X22: Requiem); it's possible this ET was a grey holding a portable cloaking device. Or that this was the Black Oil using an ET of a different race altogether as a host just like it uses a human; an ET who has the ability to turn invisible. And, as always, Mulder has "a stack of X-Files recording the same clinical results" (burnings) !
The salvage operation "Operation Falcon" is lead by the military, very much like in 4X17: Tempus Fugit / 4X18: Max. It's lead by Col. Hendernson, who is, according to DT, specialized in craft retrieval since the Cold War. Their targets are to salvage the downed UFO, to track down and kill any survivors, to prevent the public (or any unauthorized military personnel for that matter) from knowing any of this, and to silence anyone that might get in their way. This aggressive stance against aliens wouldn't be expected on behalf of the Syndicate given its agreement with the aliens, but this is way too early to know this. And the fact that there is a conspiracy inside the military to cover this up makes things even more complicated, because it's easy to mistake this conspiracy with The Conspiracy (the Syndicate) as one and the same, and thus dealing with objectives that are deeply contradictory (a reason why XF mythology has been called inconsistent). The Syndicate's actions are very limited, though on a grand scale, and salvaging downed UFOs that have violated US air space isn't in their agenda. It's more in Deep Throat's agenda, as seen again in 1X16: E.B.E. (and perhaps 4X07: Musings).
Spreading false information to
the public like the fact that this was a meteor, or that there has been
a railway accident risking an ecological disaster, or even a terrorist
nuclear warhead when the former story loses credibility, are all
copyrighted UFOlogy coverup common places.
So is the appearance of Max Fenig, the archetype of the UFO geek. What lead Max into working for NICAP and hunting UFOs is that he's a multiple abductee, although he knows this only unconsciously. He is being cured for epilepsy since he was 10 years old, when he started waking up in places he didn't remember how he got there -- and he takes drugs to cure schizophrenia at the same time. Mulder's a celebrity among NICAP members, and despite what he may think, his work doesn't go by unnoticed.
X-Files face closure
Using Mulder's insubordination
and money spending as an official cause, FBI Section Chief McGrath
succeeds in granting a decision to shut down the X-Files. And they
would have been if it hadn't been for Deep Throat. McGrath & DT
were in league ("the last best chance
we had"), agreeing the the XF
were annoying. But McGrath isn't aware of the truth on aliens (DT: "what [Mulder] knows...(laugh) what he
thinks he knows..."). Apart from
saving Mulder & the XF, DT applies Syndicate policy by allowing
the XF to continue. As seen in 5X02: Redux, the
XF can be seen but a part of large misinformation plan,
used by the Pentagon and the Syndicate to cover up its experiments
while the general
public laughs at the lunacies Mulder can utter. DT plays a dangerous
game by giving Mulder true information all the while obeying orders
that want Mulder away from the truly serious coverups (that will come
with 1X23: The Erlenmeyer Flask).
On a side note, Deep Throat's "Keep your friends close, but keep your enemies closer" line is a direct quote from Sun Tzu's famous 'Art of War'. But it was made (more) famous with 'The Godfather Part II': it was told from Vito Corleone to his son Michael, and Michael kept it as valued truth.
Max: "...this must be the enigmatic Agent Scully."
Military: "Well sir, the meteor seems to be hovering over a small town in Eastern Winsconsin."
Mulder (to McGrath): "You can deny all the things I've seen, all the things I've discovered, but not for much longer. Because too many others know what's happening out there, and no one, no government agency has jurisdiction over the truth."
Deep Throat: "Always keep your friends close, Mr. McGrath. But keep your enemies closer."