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The cold open is another flash forward. We have no idea what's happening, we just know something Bad went down

Hank is moving in on Tuco, which could be dangerous for Walt, even though Hank doesn't know anything about Walt's involvement.

Hank is able to disconnect. We see that he doesn;t have much sympathy for drug dealers, or even respect for them as people, which is kind of concerning. This is part of why Hank in particular takes so long to pick up on Walt as a drug lord later in the series, because he respects Walt and Walt is family, so Hank can't put him into the othering worldview he has of drug dealers

It's obvious that Skyler is concerned Walt left to kill himself. She's more concerned about harm to him, rather than harm he can inflict at this point.

While in the trunk of Tuco's car, Walt dreams of Skyler opening the trunk and telling him she understands. In addition to her very angelic framing in this shot (white clothes, hair backlit by the sun like a halo), this shows that Walt really does feel bad about breaking Skyler's trust, but also that at this point, it's impossible for him to not break her trust, and for her to understand. Tuco hauls him out, and breaks the illusion, because that's all it could ever be: an illusion.

Jesse is immediately, pointlessly defiant, instead of being in shock.

The establsihing shots of Tuco's hideout in this scene, after the Skyler montage, really help establish the isolation and desolation of the place, and of the situation. The only living thing is the ants in one closeup, and nothing else moved but the barbed wire fence in the wind. Walt is very far from home right now.

There's more tension here than actual fear. Nothing has happened to Walt and Jesse yet, but it could at any time.

Tuco mocks Walt's actual name, since Walt as an actual person, instead of the image he's been trying to build up, doesn't inspire fear yet.

Right now, all Walt and Jesse can do is play along with Tuco's delusions and rage, since that's slightly less dangerous. There's also the fact that Tuco has no idea he left a fingerprint behind, so he assumes Gonzo became an informant, because he can't imagine that his behaviour could possibly be a problem. Nothing is ever his fault, and the inability to accept fault is a running theme in Breaking Bad.

Tuco's plan for Walt is very similar to what Walt does do in later seasons. As Walt descends, he picks up traits of people who used to be his worst enemy. It works when Walt does it, because Walt is a lot better at planning that Tuco, and has restraint.

And Skyler has found out about Walt's second phone, so she knows Walt is keeping something from her. Since she knows Walt hid his cancer, that makes it easier for her to accept it, even if she can't comprehend what he's actually doing.

"Did I not already tell you how moronic that was?" "Hey man, at least I tried something. Almost worked, too." Not only is Jesse right about it almost working, since he can't have been able to predict Tuco's distaste for chili powder (since Tuco is just unpredictable in general), but this sort of highlights how Jesse and Walt have the opposite flaws. Jesse is impulsive and doesn't know when to quit, Walt is cautious and doesn;t now when to start, and both of those things mean they're still trapped in this room.

And we see the first example of someone underestimating Hector. Hell, both parties underestimate him; Walt and Jesse assume he can't comprehend or communicate that they're poisoning Tuco, and Tuco just thinks Hector wants his taco.

WHen Tuco really gets seriosu about shooting Jesse, Jesse is crying and begging, with no sign of bluster. The image he tries to cultivate is just as false as, well, everybody else's image in this show.

In the end, Tuco is brought low by his own rage and unpredictability. He gets so mad at what Walt says that he drops the gun, and when Jesse hits him with the rock, he goes into direct physical violence, allowing Jesse to get his gun away and shoot him.

Walt tells Jesse to let Tuco guy from his gut wound. While there's a degree of Walt keeping his hands clean there, and Jesse not being able to shoot Tuco outside the heat of the moment, there's also the fact that dying from a gut wound is a slow, painful process, and Walt is being vindictive when he says "let him bleed".

And Hank and Walt just miss each other once again, and the episode ends with Hank standing over Tuco's corpse, in the shootout remnants from the cold open.

Hector's bell dings over the credits: He's still here, and he knows Walt and Jesse, and the audience would do well to remember that.

Out of universe fact: Tuco was planned to last longer and be a villain for longer, but the actor found him too draining to play. I think the story works well with him dying here, showing him as being surpassed by the other characters in danger, and setting up that the most dangerous character is someone who has a handle on their dangerousness