This was a shack where someone lived.
Daryl take Beth to a rundown shack that he claimed to have found with Michonne. He enters the house with Beth, retrieves crates of moonshine from it, and pours her a glass. Beth drinks the moonshine then offers Daryl a drink, but he refuses saying that someone needs to have their wits about them.
Beth then convinces Daryl to play the "I Never" game, during which Daryl becomes intoxicated. Beth then says that she has never been to jail, implying that Daryl had. He then becomes furious and begins urinating on one of the walls. He then forcefully takes Beth outside to where a walker has been attracted to the house to teach her how to use his crossbow. He shoots the walker in the chest, pinning it to a tree, and tries to force Beth to kill it with his crossbow. She refuses and instead stabs it in the head with her knife. They then begin arguing, during which Daryl yells at Beth for being lost on the road and only wanting to have a drink like a "dumb college girl", and Beth demands that Daryl stop pretending not to care about anyone.
Daryl then breaks down and reveals that he felt directly responsible for Hershel's death. He tells her how he had had a shot at the Governor, but didn't take it, and that if only he kept looking for the Governor with Michonne maybe then they could have saved Hershel's life. Beth then embraces him as he continues to cry.
Later in the night, Daryl and Beth share stories of their respective families during which Beth tells Daryl that he would ultimately be the last person standing after everything was over. Daryl then says that before the apocalypse he would follow his brother, Merle, and do as he said. Beth then suggests, "We should burn it down", helping Daryl erase all his past unwanted self. Daryl smiles and tells her they will need more alcohol.
They empty all of the moonshine all over the house and prepare to light it. Daryl offers Beth the matches and she lights the money that Daryl had collected earlier, throwing it into the house. The house begins to burn and Beth and Daryl both flip off the house while watching it burn before turning and leaving.