After Ashtray stabs Custer, Fez tries to make sure that the police doesn’t know Ashtray killed Custer. But that plan doesn’t turn out well, because Ashtray impulsively grabs his guns and has a showdown with the cops. The showdown results in Fez being shot in the gut and Ashtray seemingly being killed. Though Ashtray’s death isn’t shown in the episode, there’s a laser dot on his forehead and then a thud is heard.
Originally, that scene was supposed to play out differently. In an interview with Variety, Javon Walton says Ashtray wasn’t supposed to get shot. It was changed at last minute.
“It was Fez that was supposed to get shot at first, which is crazy. And then, like a day before, they changed the storyline to me getting shot,” he explains, though it’s not explained why Levinson made the switch.
If Ashtray was indeed shot in the head, there’s a slim-to-none chance of him surviving. However, Walton is still hopeful that the drug dealing wunderkind will return in the third season. “There’s definitely hope for Ashtray to still be alive. Because if there’s somebody who could take a bullet in the show, it’s Ashtray,” he says.
As for Fez’s fate, it’s still not known whether he’ll survive the gunshot wound or if he’ll have to serve time in prison. His fate—along with Ashtray’s—will likely be revealed in the show’s third season, now that the teen drama has been officially renewed by HBO.