The small piece of the Mind Flayer that was left in Eleven's dimension managed to accumulate a physical body made out of exploded rats and humans.
Henry (again, through the Mind Flayer) possessed Billy Hargrove and terrorized Eleven and her friends as he's determined to find and kill her.
A Gate had been opened once again in Hawkins, this time by the Russians who had infiltrated the town and built a secret lab. Hopper and Joyce figured out how to close the Gate by shutting down the Russian machine.
Meanwhile, the Mind Flayer had managed to injure Eleven by "biting" her leg and leaving some of itself behind. She used her powers to get the piece of the Mind Flayer out of her skin, but for some reason, this painful experience created a mental block around her powers.
The Mind Flayer was only defeated when the Gate was once again closed, cutting Henry off from his physical form in the real world.