Red was an international drug dealer looking to operate in Twin Peaks.
At the Roadhouse one evening, he appeared to finish a conversation with Jean-Michel Renault, and then made eye contact with Shelly Briggs across the room and acknowledged her with a flirtatious gun gesture. At some point, likely in the few weeks prior to this interaction, the two had begun seeing each other.
One morning, Red met with Richard Horne and discussed with him the trafficking of a drug called "Sparkle" down from Canada.
He asked Richard if he had ever studied his hand and stated that he had a liver problem that made him stamp his foot. Red then asked about The King and I and threatened Horne to not double-cross him. Red then performed a "magic" trick with a coin that hung in the air then appeared in Richard's mouth before returning to Red.