The Scarecrow began distributing aggression fueling drugs in Gotham just as Stephanie began her career as Batgirl. These drugs caused a riot in Gotham's poorer area that was dubbed "the Thunderdome" and Stephanie caught some of the Scarecrow's lackeys distributing them at her University's Harvest festival. Post-beating, one of the lackeys went to the hospital and traces of the drug were discovered in his system. On his way to police custody with Nick Gage, the lackey was surreptitiously rescued by his boss with a well aimed burst of the drug that put the cops out of commission.
Stephanie pursued the Scarecrow to his lair. She used the inoculation she had for standard fear gas, but as she found out when she faced him, it didn't quite work against "Thrill." The Scarecrow was disappointed that all that had come after him was a "second stringer", but Stephanie showed she was not to be trifled with by kneeing him in the stomach. The Scarecrow let lose the gas and Stephanie began to hallucinate. The gas played on her own self doubt, so she imagined both Tim Drake and herself as Spoiler telling her she was a failure and that she should be dead. The Scarecrow handed Steph a beating she was unable to fend off in her state of panic and despair.
The Scarecrow was about to land the killing blow when Stephanie's frantic mind reeled through images of Barbara Gordon, thugs and her mother trying to decide who she was and remembered what her college professor had said: she was who she chose to be. Oracle broke down and yelled at Stephanie, "Batgirl! Wake up!", finally showing acceptance and concern towards Stephanie. This succeeded in snapping Steph back to life, and she grabbed the Scarecrow's foot and twisted his ankle before he could crush her head.
She told the Scarecrow that people ran from things because they could become different people wherever they land, but the reason people stayed in a place like Gotham or a cesspool like Devil's Square was for a second chance. The Scarecrow retorted that if people stayed, they had to face themselves, and no one was brave enough to face who they really were. Stephanie said she was. When the Scarecrow asked who she was, she confidently told him she was Batgirl while KO'ing him with a final kick.
Stephanie tied up the Scarecrow and left him for the cops before skedaddling herself. Her confrontation with Scarecrow helped her face her own self doubt and allowed Barbara to accept her at last.
Learn more about the Scarecrow here.