Spoilers ahead for Stranger Things 3. Actor Dacre Montgomery promised in a Digital Spy interview that whatever happened to Billy in Stranger Things 3, he would get a "redemptive ending." And he wasn’t wrong, but it took a lot of action, blood, and guts to get there.
When Max’s older stepbrother was first introduced in the show’s second season, he was the quintessential high school bad boy. But through his interactions with his abusive father, it became clear there was a softer side to him that had been stamped out. Stranger Things 3 let that side finally come to the surface — just not until the season’s final moments.
Almost immediately in the new episodes, Billy became the Mind Flayer’s new host. He accidentally hit the monster with his car and soon found himself being dragged away and possessed. This process made him one of the Flayed — aka someone being controlled by the Mind Flayer. At first, Billy just helped recruit more Flayed. He kidnapped fellow lifeguard Kathy and brought her to the monster, then helped Kathy turn her parents into Flayed, too, and soon they’d filled a warehouse with an army of possessed followers. But while the Mind Flayer later turned most of these humans into goo and absorbed them to become one huge, ultra-strong creature, it left Billy in his human form so that it could try to finish what it had set out to do: kill Eleven.
Because of his relationship with Max, Billy was initially able to fly under the radar. Max kept assuring El that Billy was always that surly, and so there was nothing to worry about. Eventually, though, even Max couldn’t deny that Billy had been taken over by the monster. It so consumed him that Billy could hardly even do his job of being a lifeguard — the Mind Flayer likes the cold, so Billy sitting in the hot sun all day wasn’t ideal, and the kids were able to confirm their suspicions that he’d been "flayed" after locking him in the pool’s sauna.
Later, El learned the Mind Flayer’s plan when she tried to get into Billy’s mind and see where the Flayed army was hiding out. During that experience, she also learned something else about Billy — he was once a happy, carefree child. El saw scenes of Billy at the beach playing with his mother, then watched when his mother left him to escape her abusive marriage — leaving Billy behind with his violent father. It allowed fans to understand where Billy’s anger came from, and how, deep down, he wasn’t evil. El later used these memories to connect with the real Billy, who ultimately sacrificed himself to save her.
In the final episode, all hope looked lost. El was too weak to use her powers, the Mind Flayer was looming, and Billy had her in his clutches. But in a last-ditch effort to get through to him, El brought up the memories she’d seen, and for a moment, some of the humanity seemed to return to Billy. Instead of handing El over to the monster, he stepped in front of her to protect her. Enraged, the Mind Flayer attacked him and left him for dead. However, Billy didn’t actually die until the gate was closed, killing both him and the Mind Flayer since the monster was also within him.
And, yes, it does seem like Billy is really dead. Remember that in his interview with Digital Spy, Montgomery called it a "redemptive ending" — with seems to confirm that this was, well, the end for Billy. Even so, Montgomery told the outlet he was "really happy" with how things turned out — which makes sense, considering he had some say in it.
In an interview with SYFY, Montgomery said he was so set on adding layers to his character that he actually went home and wrote scenes for Billy between Seasons 2 and 3. "I came in with a whole backstory for Billy … I read [the writers] this crazy side storyline — it’s actually embarrassing looking back at it — but I wrote a whole thing. And they included elements of it." Among the things Montgomery wanted to explore was who Billy’s mother was — which did end up making into the final cut.
Ultimately, the way Billy went out is about the best way a pseudo villain could go. It’s because of him that El survived, and that gets to be his legacy. That… and the mullet.
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