This is the episode that was all about exploring Garak's backstory. Is he a spy secretly working for the Cardassians? Is he just an exile?

I thought the episode was much more straightforward than literally every recap or article I can find about it, and I want to share. Because I'm a giver. I haven't seen it in years, but I can recap it because MrFarstrider's post about episode 4.22 got me thinking about it and I went looking to see if I could find other folks who share my head-canon about it. It looks like everyone but me finds Mr. Garak's stories very mysterious and not clearly wrapped up, nice and tidy, at the end.

At the start of the episode, Garak and Dr. Bashir are enjoying a meal and discussing Cardassian literature when Garak gets mad and storms off. The Dr. thinks he's ill, but he doesn't want to talk about it. The next time Garak and Bashir see each other, Garak collapses. The doctor finds out that Garak has a machine in his brain. The doctor thinks it's some kind of torture device, but Garak won't say. Eventually the truth comes out, it's an anti-torture device, it's purpose is to get Garak high and make him feel great if he's ever tortured. The machine makes him immune to torture. But he's been using it to make him feel better about living away from his people, using it way too much, he's addicted to it, and now it's broken, it can't be removed, and Garak is probably going to die because of it.

So now Bashir gets the first story of how Garak was exiled: He says he was previously a military officer who destroyed a ship containing escaped Bajoran prisoners, his aide (named Elim), a bunch of Cardassian civilians including the daughter of some big VIP. Once he was found out - exile.

Later, Garak says that his first story was a lie, story number two: He was supposed to interrogate some Bajoran child prisoners during the ending of the Cardassian occupation. He thought it was obvious that the children didn't know anything, so he gave them some money and set them free. Once he was found out - exile.

Then they fight, and Garak says no, that was a lie, and tells story three: He and Elim grew up together and were like brothers. Both of them rose to high ranks (directly under the head, Enabrin Tain) in the Cardassian spy service (The Obsidian Order). A scandal involving some escaped prisoners occurred, and he and Elim tried to frame each other for the crime of releasing the prisoners. Elim succeeded, and Garak was exiled. Garak believes he deserves his exile for betraying his best friend.

Bashir goes to find Tain, who (to his surprise) knows all about the Doctor, Garak's problem, etc. He says he'll help Bashir solve Garak's problem so that Garak can continue living in exile instead of dying and being at peace. Tain thinks Garak deserves the torture of living with people who hate him. Then he reveals one more 'fact' - Elim is Garak's first name.

After Garak recovers, the Doctor confronts him on his conflicting stories:

Dr. Julian Bashir: You know, I still have a lot of questions to ask you about your past.

Elim Garak: I have given you all the answers I'm capable of.

Dr. Julian Bashir: You've given me answers all right; but they were all different. What I want to know is, out of all the stories you told me, which ones were true and which ones weren't?

Elim Garak: My dear Doctor, they're all true.

Dr. Julian Bashir: Even the lies?

Elim Garak: Especially the lies.

So apparently this is supposed to be a big mind-screw leaving his past oh-so-mysterious, but it seems wrapped up just fine to me, particularly since Elim and Garak are the same person:

Elim Garak, a high-ranking Gul in the Obsidian Order, had some Bajoran children in custody and orders to find out what they know. Then a new order comes down, that Cardassians are leaving Bajor. He decides to release them, quietly. The children run off, but Garak made a mistake, and the Obsidian Order finds out (or is on the verge of finding out) that the children have escaped. There will be consequences, so he tries to cover his tracks and blows up the shuttle they're on. Unfortunately, the shuttle has a VIP's daughter on it, and now he's in even more hot water. He tries to cover his tracks again and at the same time, he's wracked with guilt, and leaves clues that point the finger at himself. (Elim and Garak are trying to frame each other and put suspicion off themselves at the same time) Eventually, he's caught, and exiled. He considers Elim to have died when the shuttle exploded, and from that point forward he is just plain, simple Garak.

Anyway, that's my head-canon on that episode and Garak's back story. As far as I know, no DS9 episode ever contradicts it, thought the actor's non-canonical book A Stitch in Time does so.