Red-Handed - S1-E15
Continuity mistake: When David is interviewed at the sheriff's station, after Emma says "And honestly, liars have better material", her left thumb is resting on the edge of the coffee cup in her hand. In the next shot, it's not. (00:01:20)
Red-Handed - S1-E15
Continuity mistake: In the scene where Ruby reconciles with Granny, in some shots, her necklace is tucked into her clothes. In other shots, it's outside her clothes. (00:36:25)
Answer: He knows who she is because he knows that the fairy tales are true. He was also shown to sneak out to go see Emma or someone else. Sometimes he succeeded, sometimes he didn't. This is how he knew to look for her despite his strict mother.