“Shock” is episode five of season one of Threshold.
Baltimore police in Maryland wind up in a gunfight on the docks with a gang. One of the gang members is shot, but he still manages to twist the head of one of the detectives around.
The Threshold team discover this; the gang member is one of the missing crew members from the freighter, and he had history with the gang. The gang was stealing microchips, and also importing three terrorists from Indonesia.
Caffrey, under the guise of being Homeland Security, discover that the infected crew member has been captured, and ask to take custody. Unfortunately, it seems the real Homeland Security has beaten them too it, and refuses to give him up, as he’s their best lead to the terrorists.
Threshold manage to find the terrorists, but by the time they get to DHS, the crewman has escaped. He plans to use the alien signal on the subway in Washington, infecting many more people.
Pegg isn’t mutating as a result of his exposure, but he’s gaining enhanced eyesight.