SPOILERS FOLLOW for the first episode of season 3 of The Flash.
Season three begins with a new timeline created when Barry went back in time to prevent Reverse Flash from killing his mother. In this world Barry still has the speed power, but no one knows him as the Flash, the speedster in the world is Kid Flash (Wally West). Kid Flash begins the episode in a battle with The Rival, another speedster who wants to prove that he is truly the fastest man alive. Meanwhile, Barry is trying to get up the courage to ask Iris out, in this world, they don’t know each other. Iris and Joe’s relationship is strained in this timeline, they don’t speak, and Joe has a drinking problem and misses work frequently. Barry returns home where he lives with both of his parents alive and well. The whole family is happy.
Reverse Flash (Eobard Thawne) is being held captive by Barry to prevent Reverse Flash from ever killing Barry’s mom again. Thawne calls this new timeline “Flashpoint.” As a side effect of the Flashpoint Barry has flashbacks of his former life throughout the episode. Thawne tells Barry that the more he uses his speed the more he will lose his memories of his original timeline, eventually forgetting that life altogether. The only way to prevent that from happening is for Barry to take Thawne back in time and allow Thawne to kill Barry’s mother, effectively making Thawne the hero and Barry the villain of the story. Barry does not want to do this, because here his parents are both alive and he has spent an entire life with them.
Cisco Ramon has become the richest man in America and the former STAR labs is now named Ramon Industries. Kaitlin is an optometrist across town. Barry appears as the Flash and brings them together, along with Iris and Wally, to help defeat The Rival. In the ensuing fight, The Rival is defeated, but not before mortally injuring Wally. Barry looks at all of his friends and family in this world and realizes that even though his life has changed for the better, everyone around him has suffered because of his selfish act. Barry, along with Iris, goes to Thawne, and Thawne makes Barry ask him to kill his mother to fix things. Thawne agrees and Barry returns him to the scene of the crime.
Everything has seemingly returned to normal, however, as Barry, Wally, and Joe are having a beer in their house, Barry asks where Iris is. Joe gets visibly upset and leaves. Wally tells Barry that Iris and Joe don’t speak. So there are residual effects from the Flashpoint.
EPILOGUE: Edward Claris (The Rival in the Flashpoint world) is awakened by a voice telling him “It’s time to wake up.” While something scratches the word “Alchemy” on the mirror.