In this chapter, Madison makes her way to the Blue Lagoon in an attempt to interrogate Paco about the apartment he rented from Adrian Baker hoping to find out who rented the location of The Lizard trial.
Arriving at the Blue Lagoon, Madison talks to the bartender to find out that Paco is in the V.I.P. lounge. The bouncer tells her that he cannot let her through because Paco has asked not to be disturbed.
Madison observes a girl dancing on a nearby platform who then catches the attention of Paco and is invited into the lounge. Hatching a plan, Madison enters the women's bathroom. Once inside, she musses her hair, undoes the top of her shirt, tears her skirt shorter and applies makeup hoping to catch Paco's attention. She returns to the platform and if the player completes the QTEs she is invited to join Paco.
Madison asks if they can go somewhere more private and Paco takes her to his office upstairs. Once in the office, Madison's plan to interrogate Paco goes sideways when he takes her purse, which contains her weapon. Disarmed by Paco, Madison loses her nerve and tries to get out of the situation until Paco draws a gun and demands a striptease. Madison reluctantly starts to dance; while desperately thinking of a way out she notices a lamp on the table behind her. The player can have Madison snatch the lamp and bludgeon Paco unconscious.
Madison ties Paco to a chair and holds a gun to his head, demanding to know about the apartment. At one point, one of Paco's goons will knock on the door asking if everything is OK. Madison gets rid of him by faking an audible sexual encounter or by going to the door and telling the goon that Paco is preoccupied; either way the goon will leave. After the goon leaves, Madison manages to get the killer's name from Paco by applying pressure to his testicles. Madison then leaves, ending the chapter.
- Pride Saved – Take off no more than one item of clothing during the strip tease.
- If you look at Madison during the dance scene, she's wearing navy or dark blue underwear, but during the striptease, it is revealed that the underwear also sports a yellow or lime green trim.
- If Madison was injured by electric tools in "The Doc", you can see her wounds during the striptease.
- You don't have to apply lipstick or muss Madison's hair to get Paco's attention.
- This chapter will be skipped if Madison is killed in "The Doc," and it will show the intro for "Fish Tank" instead (if Norman Jayden survived the fight with Mad Jack).
- This is the third scene in the game that potentially involves nudity; Madison can be undressed to the point that she removes her bra, showing her breasts. She cannot be made to remove her underwear.
- The girl dancing at a nearby platform is the same girl that appeared in the chapter "Kramer's Party." She is bisexual, since at Kramer's party she is seen kissing another girl, and in "Sexy Girl," she is with Paco. She also appears in the intro scene of the game.
- A glitch can occur, causing Madison to be able to shake her hair twice, but not be able to put on her eye liner, forcing the player to go back to the main menu.
- Another glitch can occur that causes Madison to twitch into her normal model form, with no facial expression or arm movement.
- Madison's thoughts refer to Adrian Baker as "Doctor Death" whether or not she was taken to his basement in her previous chapter.
Chapters played as Ethan (in chronological order) - Prologue | The Mall | Father and Son | The Shrink | The Park | Where's Shaun? | Paparazzi | Lexington Station | The Motel | The Bear | The Butterfly | The Lizard | Fugitive | The Shark | On the Loose | The Rat | The Old Warehouse
Chapters played as Scott (in chronological order) - Sleazy Place | Hassan's Shop | Suicide Baby | A Visitor | Kramer's Party | The Golf Club | Manfred | Eureka | The Cemetery | Flowers on the Grave | Trapped | Face to Face | Hold My Hand | Origami Killer
Chapters played as Norman (in chronological order) - Crime Scene | Welcome, Norman | Kick Off Meeting | Nathaniel | Covered Market | Shrink and Punches | Jayden Blues | Under Arrest | Mad Jack | Fish Tank | Solving the Puzzle | The Old Warehouse