'American Horror Story': Ryan Murphy talks the Angel of Death's arrival to Briarcliff and teases season three -- EXCLUSIVE

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[SPOILER ALERT IF YOU HAVEN'T SEEN THE MOST RECENT EPISODE OF AMERICAN HORROR STORY: ASYLUM!]

The Angel of Death, in the form of American Horror Story season one star Frances Conroy, visited AHS: Asylum last night but ended up only taking a few cast members with her, most notably Grace (Lizzie Brochere). Meanwhile, Jude discovered that she did not actually kill the little girl in the blue coat and realized that Sister Mary Eunice was possessed by the devil. EW talked to co-creator Ryan Murphy about all these developments, Dylan McDermott’s Bloody Face role and details on season three.

ENTERTAINMENT WEEKLY: Where did the inspiration come from for this episode?
RYAN MURPHY: Well the episode is one of my favorites because I think it just has great performances and I really love what it’s about. I love Franny and she and I were presenting at the Creative Arts Emmys and I said, “I think I have something really good for you, sort of the opposite of what you did last year.” She and Jessica loved working together. So we came up with this character and I like that she’s around in all the individual stories at that pivotal moment of are you going to fight or are you going to die.

But when we were coming with the idea of it, I was meeting with hair and make up and Lou Eyerich, the costumer, and we at first came up with this idea that she was the black version of Miss Havisham. But I didn’t like that. I thought let’s do something unexpected. So our inspirations were very bizarre. We took sort of like 1940s , hard-boiled noir women and mixed it with a sort of Comme de Garcon meets Japanese thing. I was very proud of that look and I thought Franny was very yummy. You could see why people would want her to kiss them.

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Was her name and the idea based on fact?
Yes we took things from several religions. I also love the Angel of Death’s relationship to the Devil. And Franny will come back in several episodes.

I loved the scene in the diner with Jude and the Angel of Death. So Jude has tried to kill herself several times before?
Yes.

Will we meet the man she was going to marry?
No. He was sort of her backstory. I really wanted to see how did Jude get to the nunnery. I love Jessica as the faded chanteuse in the run down hotel room. She really loved doing that stuff. What was her dark night of the soul that got her to the nunnery? And I love that literally she drank herself into a stupor and woke up and there she was outside the Cloisters nuns.

And the twist with the girl being actually alive was great.
I know! I felt so bad for Jude. I think so many people run from secrets and I thought what happens if the thing you’re running from turns out to be completely a lie?

The Lana storyline is just like a sad train to Sadtown. She escapes Bloody Face and then gets in a car with that crazy guy. Is there any happiness in sight for her?
Well I don’t wanna give too much away.

Will she at least get some kind of comeuppance?
Oh yeah. I mean Sarah and I talked about that when we first started to write this stuff. I didn’t wanna do something that was just so awful and then there’s your bad ending. There are many characters in the show and most of them don’t survive. But I thought the Lana story was really about the power of the spirit to survive any and all horrors. I thought that there’s great scenes in the one after Dark Cousin which is the most f****ed up Christmas episode of all time where instead of praying for Lana, you’ll be cheering for Lana. It’s a script I think Sarah loved playing. We’re writing the ending right now so I think people will love what happens to Sarah and what she ultimately does.

Lily Rabe is just having a ball clearly.
Yeah next week has my favorite that Lily Rabe’s character does where she decorates the Christmas tree. It’s sort of like Well how would the devil decorate a Christmas tree? So that’s just a laugh riot.

The fun thing in doing a show like this is for the most part I just hire my friends and I say Well what have you always wanted to play and haven’t played? In Lily’s case, I think people know her for her Broadway ingénue Tony nomination stuff but she’s very f***ing funny.

Is this the last we’ve seen of Grace? Will she appear in ghost form?
Well there are no ghosts. The big question with Grace is what happened to her body?

And that’s answered next week?
Yes.

So now that Jude knows Mary Eunice has been possessed, is she basically going to go back to Briarcliff and battle the devil?
Yes and it’s all wonderfully contained in our fabulous Christmas episode. The Christmas episode is a very interesting episode because when we were plotting out the season I really wanted to do a Christmas episode because I always thought, based on my research, that 1964 was a very interesting year in terms of the secular and the commercial. That episode has a scene where it’s Santa Claus vs. Sister Jude.

And Santa is Ian McShane right?
Yes! I can’t believe that he did it. We wrote it and I kept saying, “We need an Ian McShane sort of guy for this.” He was a fan of the show so I’m like, “Well I wonder if he would do it?” So we sent him the first five pages, which is the darkest Santa Claus story of all time, and he thought it was great. He and Jessica have this amazing scene together.

So is he the devil?
No he’s like this crazy psychotic. No more devil-jumping this season. No Ian McShane plays a crazy person who was victimized so badly in prison that he made a psychotic break and decides he’s Santa Claus and he knows who’s been naughty and who’s been nice. But the next episode also has a lot of hilarious Lily Rabe/What does the devil want for Christmas?

Where does Thredson go from here now that Lana knows his secret?
Well that’s in the next episode. In this episode, Lana comes back in the insane asylum just like Kit goes back. No one knows yet that they’re back there. The question in the next episode is what happens to Thredson and obviously he has to shut Lana up because she holds the keys to the kingdom.

It sounded like Dylan McDermott’s voice as modern day Bloody Face. Is he modern day Bloody Face?
Yes. Dylan is modern day Bloody Face. So the question is Why is he the modern day Bloody Face? What is he doing? And that’s revealed in episode nine.

Is the previous episode the last we see of Mark Consuelos’ Spivey?
Oh God no! No no no! He has a very romantic scene coming up with Sister Mary Eunice. Mark wrote me after that and he said, “Well I just busted my no nudity cherry.” No I love Mark. I think he did such a great job and he was so unexpected and he really got down and dirty with that part.

You got greenlit for a season three so does that mean you have a plot already for it?
Yes. I do. I have an idea and I went to Jessica and she was very excited about the idea and possibly where it would film and how we would make it. I did the same thing last year—we almost work a year ahead. It’s a very dense script and it’s a lot of prep time. I do—I know what next year is.

Last year, Billie Dean gave that speech in the finale about asylums, which was a clue to this season. Are you planning on putting clues in the finale this year?
I think so. We haven’t decided what lead actors are coming back. I know what it is and I know that there will be clues in the final episode. Last year we didn’t announce what it was about—we waited til the summer to do it. I think we’ll announce it earlier this year.