Peggy Blumquist

In 1979, Peggy Blumquist is a hairdresser in Luverne, Minnesota who is married to her high school sweetheart, local butcher Ed Blumquist. She is dissatisfied with small-town life and wants to take a $500 Lifespring course in "self-actualization" (which is implied to be a scam) so she can better herself. This conflicts with Ed's plans to use the money to buy the butcher shop where he works.

One night, she accidentally hits Rye Gerhardt after he wandered onto the road after spotting a UFO. Peggy panics and drives home with Rye on her hood, stuck through her windshield, instead of calling the police (a reference to the murder of Gregory Glenn Biggs).[5] When he regains consciousness in their garage and attacks Ed, Ed kills him in self-defense. They dispose of the body and wreck Peggy's car to make it look like Ed crashed it.

Unbeknownst to Peggy, Rye is a member of the Gerhardt crime family who has just murdered three people before being distracted by the UFO. State trooper Lou Solverson figures out what happened and tries to persuade the Blumquists to come forward so the police can protect them, but Peggy tells him to leave. Peggy at first wants to flee to California, but Ed convinces her to stay. She sells her car so Ed can buy the butcher shop, only for that to fall through as Gerhardt enforcer Virgil and Bear's son Charlie try to kill Ed in the shop. In the course of the attack, Virgil is killed, Charlie wounded, and the shop burns down.

When the Gerhardt family matriarch, Floyd, learns that Rye was killed by "the butcher", she mistakenly assumes that Ed is a hitman and sends her eldest son Dodd to kill him. Peggy and Ed manage to subdue Dodd, tie him up and hold him prisoner in their home, planning to give him to a rival crime family in Kansas City, Missouri in return for money and protection. Dodd gets loose of his bindings, however, and attacks Peggy. Just as Dodd is about to kill Peggy and Ed, however, traitorous Gerhardt enforcer Hanzee dispatches him. Moments later, the police arrive and Hanzee opens fire on them; Peggy stabs him in the back with a pair of scissors, and she and Ed are taken into police custody.

The South Dakota State Police strong-arm Peggy and Ed into wearing wiretaps when meeting with the Kansas City mob in return for reduced jail time, and place them under protective custody in a hotel. The Gerhardts attack the hotel, tricked by Hanzee into thinking that Ed has taken Dodd there, and Peggy and Ed flee during the resulting gunfight between the Gerhardts and the police. Ed sees a UFO as they run away, but Peggy dismisses it as "just a flying saucer". Hanzee runs after them and mortally wounds Ed, but Peggy manages to drag him into a grocery store and hole up in the walk-in freezer. As Peggy frantically tries to figure out a means of escape, Ed says that their relationship has been irreparably damaged by all that has happened; he then dies in her arms. Lou arrests her and takes her to jail. On the way there in Lou's police car, Peggy laments that she just "wanted to be somebody".

Noah Hawley has stated that when he started writing season two, he initially planned the season out as being more focused on Ed and Peggy instead of being an ensemble drama, saying "this idea of a couple, played by Jesse Plemons and Kirsten Dunst, who are caught between these two rival crime organizations, the Gerhardt family and the Kansas City mafia. Well, suddenly you have two rival crime organizations that need characters, and you also need your cops who are going to interject themselves between these people. So suddenly you have four or five huge moving pieces that have to be serviced."[6]

During filming, Dunst purposely did not read any of the non-Ed and Peggy related storylines, saying "Peggy's so in her own world, I didn't want to be influenced by anything else that was happening in the story. So I just would read things that were happening with Ed and Peg. She's so tunnel-visioned about her goals and what needs to happen that I didn't want to think about the whole show. It makes it more fun for me now, because I can watch and enjoy it myself and not know what everyone's going to say."[7]

Dunst received widespread critical acclaim for her performance, which was often cited as one of the best performances of 2015.[1][2][8][9]