It happened in a flashback, which was the lion's share of the episode. Although it delayed our seeing Jimmy's response to the murder of Angela and her female lover - he spent most of the episode in shock in Princeton - the flashback filled in some of the crucial missing pieces of Jimmy's story.
Jimmy's an up-and-coming successful student at Princeton, where he meets Angela and gets her pregnant. He might have had a happy life, but Gillian comes up from AC and flirts with his professor - who doesn't even imagine Gillian could be Jimmy's mother - and sleeps with him. When Jimmy sees her walking out of the room, she feigns irritation at being taken advantage of. When Jimmy sees the professor, he confronts him and soon beats the prof to a pulp - more than enough to get him expelled. Later that evening, he mostly undresses and puts his drunken mother to bed. She's hammered but not passed out, and when he leans over to kiss her goodnight - actually, already on top of her - she pulls him into all-out sex. Jimmy now has lots of reasons to want to get out this place and join the Army.
This puts Jimmy's later life - the life we've seen in these first two seasons of BE - into much clearer perspective. Nucky not Gillian is the source of the good and decency in Jimmy's personality. Gillian brings out the worst in Jimmy, and is always urging him to do the worst things. Back in present time, Jimmy almost kills Gillian when he comes back to Atlantic City, and sees his son in Gillian's hands. But the Commodore saves Gillian - who then urges Jimmy to kill the Commodore, which he does, after he narrowly escapes being killed by the Commodore himself.
As for Nucky, he's finally beginning to see the truth about Margaret - she's holding him responsible for her daughter's polio (God has punished her for her sins). At this point, Nucky would be better off without her and her guilt.
As I've said before, I see a re-alliance with Jimmy and Nucky in the future, maybe near future. Both men are low on true friends. Nucky would certainly have no problem with Jimmy killing Doyle and Manny in retribution for Angela. And Jimmy should have no problem with Nucky getting Lucky and Al out of his hair (but not killed, because history won't allow that).
But, first, Nucky has to deal with the charges against him. Van Alden's unmasking as a pyscho killer should help, and it will be good to see how this plays out in the season finale next week.
And see also Boardwalk Emipre on HBO ... Boardwalk Empire 1.2: Lines and Centers Power ... Boardwalk Empire 1.10: Arnold Rothstein, Media Theorist ... Season One Finale of Boardwalk Empire
The Plot to Save Socrates
"a Da Vinci-esque thriller" - New York Daily News
"Sierra Waters is sexy as hell" - curled up with a good book