Board Thread:General Discussion/@comment-5521796-20130203025813/@comment-5821891-20130203035826

August: She has a destiny. And you... this life? You’re going to keep her from it. Okay? You believe in magic?

Neal: I take it you do.

August: So will you. Trust me. I’m going to show you something… something that’s going to make you look at everything differently. And, when you see what I have in here, you’re going to listen. You’re going to believe every word I say.

Neal: Yeah, right. (August opens the box and Neal looks inside. It's unknown what is inside.) Okay, I’m listening.

August: There’s a curse... and it needs to be broken. Emma, is the key. I was tasked with keeping her on track and you, my friend, just got caught in the crossfire. Now, I’m going to tell you a story. And, at the end of it, you’re going to have to make a decision. Will you do the right thing... or not? So... are you ready?

Neal never says he does not believe in magic. The whole point of August showing Neal what was in the box was to convince him that August was also from the enchanted forest so Neal would listen to August and leave Emma alone.