*Disclaimer: This article contains spoilers for It: Welcome to Derry Episode 3 'Now You See It.' Readers' discretion is advised.*It: Welcome to Derry Episode 3 was titled 'Now You See It,' and fans were looking forward to Bill Skarsgård’s return as his iconic Pennywise character on the small screen. While the actor is yet to make an appearance in HBO's horror prequel series, It finally revealed its existence and had a scary encounter with Dick Hallorann in the latest episode.Dick Hallorann (played by Chris Chalk) is a fictional character from Stephen King's universe, featured in his works like The Shining and Doctor Sleep. Hallorann has telepathic abilities, which are being used by the army to locate the 'entity' haunting Derry through many decades.It: Welcome to Derry Episode 3 opened with a flashback of a Young Francis Shaw being chased by It in a Skeleton Man form. During the scuffle, one of Francis' new friends used a slingshot to injure It and save Francis. Years later, the slingshot became a conduit for Hallorann's scary encounter with Pennywise in one of his psychic visions.More on this in our story.It: Welcome to Derry Episode 3 revealed Dick Hallorann's psychic powers View this post on Instagram Instagram PostWhile HBO's horror prequel series is yet to reveal its creepy clown in all his glory, Episode 3 “Now You See It'' finally gave a chilling preview. The latest episode in It: Welcome to Derry saw the 'entity' haunting a young Francis Shaw (played by Ginny & Georgia star Diesel La Torraca) some decades earlier. The episode opened with a young Francis attending a carnival with his father, where he encountered a scary-looking skeleton man.Later, he befriends an indigenous woman named Rose and gifts her a slingshot. In a creepy chase sequence through a forest, young Francis encounters the skeleton man once again, but this time, he is even more grotesque, confirming that it is one of the manifestations of Pennywise. While the skeleton man was about to kill Francis, he was saved by Rose, who attacked It with her gifted slingshot.In addition to being spooky, this flashback sequence in It: Welcome to Derry Episode 3 became an important setup for Dick Hallorann's scary encounter with Pennywise in the present timeline. We also learn how General Shaw and the army are trying to capture the 'entity' and using Halloran's 'Shining' powers to locate It. The slingshot became an effective conduit for Hallorann to maintain a psychic connection to Pennywise and he used it (by literally touching it) to locate the creepy clown in a chilling vision.Welcome to Derry Episode 3 saw Dick Hallorann's scary encounter with Pennywise View this post on Instagram Instagram PostIn It: Welcome to Derry Episode 3, General Shaw ordered Major Leroy Hanlon and his partner, Captain Pauly Russo, to fly with Hallorann as their 'human compass' over the forest to locate It. On the helicopter, Hallorann touched the slingshot (that injured It in the past) to form a psychic connection to Pennywise and he was transported to a dark place.Soon, the ground beneath Hallorann began filling with water and he came face-to-face with the clown's circus stage. Two yellow eyes emerged from within, signalling Pennywise's existence as he asked Hallorann, 'Who are you?'Dick Hallorann's scary encounter with Pennywise in It: Welcome to Derry Episode 3 concluded with It's iconic floating bodies in the deadlight. While Hallorann is scared to see the floating bodies, he sees his dead grandmother among them, who also possessed his Shining powers. This sequence was concluded by an ominous warning from Hallorann's grandmother:“He’s coming, Dickie. Get out of here now!”This disturbing vision and grandmother's ominous warning set the stage for an exciting appearance by Pennywise in the upcoming episodes of It: Welcome to Derry. When recounting this vision to General Shaw, Hallorann says that It was not supposed to see us, hinting that the entity holds far more power than the army had anticipated.It: Welcome to Derry releases weekly episodes on HBO every Sunday.For the latest scoops on your favorite TV shows and movies, follow SoapCentral.