Summary
In black-and-white, Leonard complains to the person on the phone that his condition has limited his credibility with people, suggesting, "I guess it's some kind of poetic justice for not believing Sammy." He complains to the person on the phone, who he refers to as "Officer."
Another flashback to the moment Sammy's wife came to visit Leonard at his office. "I found out later that she went home and gave Sammy his final exam," Leonard narrates, and we see Sammy's wife at home telling Sammy, "It's time for my shot." Sammy takes out some insulin to give his diabetic wife a shot. Leonard narrates, "She knew beyond a doubt that he loved her, so she found a way to test him." Immediately after he gives her the shot, Sammy's wife turns her watch back and tells him that it's time for her shot. He has no memory of the last shot, so he believes her, and gives her more insulin. She does this again and again, until all the insulin sends her into a fatal coma. Leonard tells the person on the phone that Sammy has been in a home ever since, and doesn't even know that his wife is dead.
"I was wrong about Sammy, and I was wrong about his wife, she wasn't interested in the money," Leonard says. He talks about the fact that Sammy was faking recognition, pretending to recognize people in order to integrate with the world. "You bluff it to seem less of a freak." Suddenly, the person on the other end of the phone asks something and Leonard says, "What drug dealer?"
Back in the color sequence, Leonard is in his car and looks at a note to himself that says, "Tattoo: Fact 6 Car License SG137IU." He goes into a tattoo parlor called Emma's Tattoo and gets the plate number tattooed onto his body. Suddenly, Teddy bursts in and asks why Leonard parked out front and why he is still in town and hasn't gone up North yet. Teddy asks Leonard for the keys to his car so he can move it, but the tattoo artist tells Teddy to leave the room.
When he's done with the tattoo, Leonard goes to speak to Teddy, who tells him that it's not safe for him to be there anymore because "that cop" is looking for him. He tries to get Leonard to put on new clothes, but Leonard has no idea what Teddy is talking about. "He's a bad cop. He's the one that checked you into the Discount Inn. He's been calling you for days, slipping envelopes under your door--shit like that," Teddy says. Teddy elaborates that the cop is trying to mess with Leonard and tell him that John G. is some local drug dealer.
Teddy tells Leonard that the cop who has been calling him wants Leonard to find out how Jimmy Grantz, the drug dealer, is running his operation. "Somehow you're involved," Teddy says, and explains that he knows this because he's a snitch who's been paired up with the cop, and if the cop found out he was working with Leonard, he'd kill Teddy.
Teddy tells Leonard to leave town and sends him into the next room to change. Leonard pulls out a Polaroid of Teddy, on the back of which is written, "Don't believe his lies." Leonard vows not to trust Teddy, when he finds a coaster from Natalie's bar in his pocket. He then finds a burnt and crumpled polaroid in his pocket, the subject of which he cannot make out. He climbs out the window of the tattoo parlor and goes to his car to drive to Ferdy's. Natalie is outside and she taps on the window, saying "Hey Jimmy." When she realizes it's not Jimmy, she apologizes and goes into the bar.
Black-and-white. Leonard talks to the cop on the phone, from whom he learns that Jimmy Grantz sells drugs out of the bar where Natalie, his girlfriend, works. "I always figured the drugs angle would be the best way to get him," Leonard says. Leonard goes down to the lobby of the Discount Inn to meet the officer, packing up his chart of information and his file in the process.
In the lobby, he finds Teddy. As Teddy greets him, Leonard calls him "Officer Gammell" and they go out to the car. Leonard pulls out his Polaroid to take a picture, but Teddy wants to go to a more shaded area to take it. Leonard takes the picture and Teddy tells him to just write "Teddy" on the Polaroid, since he's undercover. Teddy tells him his phone number in case Leonard has to reach him, then sends him on his mission to find Jimmy Grantz alone. "Make him beg," he tells Leonard, before Leonard leaves.
Leonard drives a pick-up truck to the abandoned building where we saw him kill Teddy at the beginning of the film. He wanders into the house, when Jimmy Grantz pulls up in the Jaguar that Leonard has been driving throughout the movie. Jimmy calls for Teddy and Leonard has a flashback to an image of his wife.
As Jimmy comes into the building, he asks what Leonard is doing there and calls him "Memory Man." "Do you remember me?" Leonard asks, and Jimmy says he does, before asking where Teddy is. Abruptly, Leonard beats Jimmy up, holding up a crowbar and ordering Jimmy to strip. "My associates are not the kind of people you wanna piss off!" Jimmy yells, as he begins to strip.
Leonard tells Jimmy to take off his pants because he doesn't want to get blood on them, and Jimmy begins to plead, telling Leonard that he has 200 thousand dollars in the car. Leonard tells Jimmy he doesn't want the money, and the men fight. Leonard believes that Jimmy is his wife's killer and he strangles the drug dealer with his bare hands. He then puts on Jimmy's clothes and takes a Polaroid of Jimmy's dead body.
As he's dragging Jimmy's body down to the basement of the building, Jimmy whispers, "Sammy" and Leonard is startled. "How does he know about Sammy?" Leonard thinks, as he hears Teddy pulling into the parking lot. "What have I done?" he thinks, and runs outside, sure now that Teddy is a bad man.
He runs out to the parking lot and tells Teddy that there's a man who's hurt inside and that he cannot remember what happened. "Don't worry, I'm a cop," says Teddy, and comes inside with him. They go downstairs and as Teddy goes to look at the body, Leonard hits him over the head. "So you remember me now, huh?" Leonard says, when Teddy yells at him by name.
Leonard pulls Teddy upstairs and holds him at gunpoint, asking him who Jimmy is. "He raped your wife, he fucked up your brain," Teddy tells him, but Leonard doesn't believe Teddy. "How did he know me?" Leonard asks Teddy, and Teddy tells Leonard that Jimmy dealt out of the Discount Inn and was suspicious of Leonard when he saw him taking a picture of the motel when he first arrived.
"He knew about Sammy! Why would I tell him about fuckin' Sammy?" Leonard screams, and Teddy intimates that Leonard tells everybody who will listen about Sammy, that it's a story about himself that he made up to alleviate his own guilt. Teddy reveals that Leonard's wife survived the assault, but didn't believe Leonard's condition and was driven away by it. Teddy even points to the fact that Leonard takes insulin as evidence of the fact that he is the real Sammy.
"Sammy was a con-man, a faker," Teddy tells Leonard, and reveals to Leonard that Sammy didn't even have a wife. "It was your wife who had diabetes," Teddy tells Leonard and Leonard has a flash of a memory of giving his wife an insulin shot.
Teddy then reveals to Leonard that he has already killed the man who assaulted his wife, but forgot it. "I helped you find him over a year ago. He's already dead...We found him, you killed him," Teddy tells Leonard, saying that the men were just a couple of junkies who didn't realize that Leonard's wife had a husband. Leonard is crestfallen when he realizes that he has already killed his wife's assailant. He looks at the Polaroid of himself pointing at his heart. "I took that picture, just when you did it," Teddy tells him.
Teddy says that Leonard took out 12 pages of his own police file in order "to create a puzzle [he] could never solve." Teddy says that there are John Gs everywhere, and that even his name is "John G." He tells Leonard he is envious of the fact that his life has such a sense of purpose.
Leonard walks towards Teddy and holds his gun up, saying, "I should kill you." Teddy assures him, "You're not a killer. That's why you're so good at it." Leonard goes outside and gets in his truck, writing, "Don't believe his lies" on the back of Teddy's photo and burning Jimmy's photo. He then writes Teddy's license plate number for a new tattoo, to trick his future self into thinking that Teddy is the real John G.
Leonard puts his stuff in Jimmy's car and takes a picture of it, and when Teddy tries to tell him that it's not his car, Leonard insists, "It is now!" Teddy tries to dissuade him, since it belongs to the man he just killed. "You know, I think I'd rather be mistaken for a dead guy than a killer," Leonard says, and keeps the gun that Teddy gave him. Leonard drives away as Teddy stays behind looking for his keys in a patch of tall grass.
Leonard stops at Emma's Tattoo and looks at the note with Teddy's license plate number on it.
Analysis
The story of Sammy Jankis serves as a foil for Leonard's own plight. In a strange coincidence, the case that still haunts Leonard is one in which he treated someone with the exact condition he now has. Sammy's life was destroyed not only by his condition, but by Leonard's diagnosis of the condition, and now Leonard must live not only with his own memory-loss woes, but with the memory of a time when he was not sensitive to the same condition in another person.
It is Leonard's diagnosis of Sammy's condition that tortures Sammy's wife. When the doctor evaluates Sammy, he finds that the condition is not a physical one, but a mental one. With this evidence, Leonard decides that Sammy is not eligible for coverage by insurance, which fills Sammy's wife with doubt about whether he is actually faking or not. This doubt is what drives her insane, and leads her to instigate her own death at Sammy's hands.
The plots of the color scenes and the black-and-white scenes start to converge more as we approach the end of the film. When Teddy shows up at the tattoo parlor, he alludes to the man that Leonard has been talking to on the phone in his motel room. Teddy lays it out clearly—the policeman is a bad man who is messing with Leonard for fun and it is dangerous for Leonard to speak with him. Though we have already seen Leonard distrusting the man on the other end of the phone and feeling confused by the cop who calls him, Teddy lays it all out more explicitly.
Teddy turns out to be less of a voice of reason than we suspected, however, when we realize that he has been using Leonard to help him kill people. Teddy himself is the bad cop who has been messing with Leonard. His knowledge of the fact that Leonard has a condition and will stop at nothing to kill anyone with the initials "J.G." allows Teddy to manipulate Leonard to do his bidding. The film has led us to believe many different things about Teddy. Sometimes he seems like a character that Leonard ought to trust more than anyone else, but now, he is revealed to be the true villain of the film.
The film outlines a nightmarish scenario in which no event ever has any consequences. While in the beginning, we are led to believe that murdering "John G." will bring Leonard some form of satisfaction and break the cycle of his condition, the devastating fact revealed at the end is that this is not the case, and that all of the action of the film takes place over a year after Leonard has already killed his wife's assailant. The tragedy of the film is that Leonard is doomed to a life trapped inside his own revenge impulse, and that there is no hope for redemption. Teddy tries to frame the situation as Leonard's own making, as something to give a sense of purpose to his life, but the truth is, Leonard has been trapped in an endless cycle, and the only way to break out of it is to stop others from manipulating him.
