Colter replays the events over and over, getting better and sharper every time - and slowly falling in love with Christina, his fellow passenger.
And yes, if you hadn't guessed it already, he's already dead. He asks Christina to check the web on her phone to Google his name, as he interrogates a little old lady about the military badge he saw on Goodwin's uniform. Christina tells him that 'his friend' Colter died in Afghanistan two months earlier.
Colter finally narrows it down to find the bad guy - Frost (the guy who left his wallet on the train and gets off a stop early -- even though he should still be on the train to see the other tanker pass by as the military suggested).
First Colter disarms the bomb in the toilet, then jumps from the train when he sees that Frost dumps his wallet back onboard (and there's no reason to do that -- as if they'll find his wallet, which won't have survived the blast, and assume he died, rather than check dental records of actual dead bodies). Colter follows Frost to his truck, inspects the dirty bomb inside, but is shot - and Christina is shot too for following him. The train still explodes - there was a second receiver on board.
Back in the present, he gives the bad guy's name, location and license number to Goodwin. The military track him down along a quarry road, and he is arrested live on tv. The team celebrate. The guy on crutches promised Colter his freedom - but has now changed his mind and is preparing to wipe clean his memory. Colter asks Goodwin to go back inside one last time to save the day, even though she said it has already happened and is pointless.
Colter is sent back. First he asks out Christina on a date. He then finds both mobile receivers to disarm the bomb. He finds Frost before he can leave, smacks him around a bit, and then chains him up. He makes a call from Frost's phone to the Feds to give him up. Meanwhile he texts Goodwin a ridiculously long message in a few seconds, and then phones his dad to make peace with the past. Back with Christina, Colter then makes a bet with the unfunny comedian that he cannot make everyone laugh - which he does, so he can enjoy his last few moments alive.
In the present, Goodwin is in the room with Colter and has locked the doors. An irate boss is trying to get inside.
As the time reaches zero, Colter kisses Christina as Goodwin turns off his life support ... Time freezes for a moment, then continues. Colter and Christina get off the train to enjoy their day together and stop off at a modern art decoration. Of course this makes no sense (even if it was an alternative reality playing out independenly if you believe in all that) as surely at this point Fentus would have returned to control his own brain and body again.
Anyway, back at the military base, Goodwin (in the past) receives a text from Colter, a very long text, explaining that the experiment worked - and that he apprehended Frost and to warn her about the future use of the program. Goodwin enters the boss's room to overhear a conversation that a bomber gave himself up earlier today, which is a shame as they could have used that for the first run of the Source Code.