For the first time we see that this comic, which heretofore has involved new villains and new heroes, definitely takes place on Earth-616.
Local cop Lieutenant Flores summons Cloak and Dagger–two street-level heroes known for looking out for runaway kids–to help find the Runaways. Flores is working for The Pride, and he tells Cloak and Dagger that the older Runaway kids have kidnapped the baby of the bunch, Molly Hayes.
C&D find the gang, fight them, and are winning until Old Lace gets involved.
Then it turns out Molly can yank Cloak’s cloak off him.
Once the kids have shown they can protect themselves, everyone gets to talking.
“How blonde are you?” Exactly. Cloak and Dagger have dealt many, many times with corrupt cops. They should have been at least a little suspicious that a group of kids would kidnap another kid.
As the kids and C&D part ways, the Runaways are hopeful that the NYC-based teen heroes will alert The Avengers about the existence of The Pride and send help. But before Cloak and Dagger can leave Los Angeles, The Pride show up and mind-wipe them–so they have no memory of The Runaways.