It was a dark night at the Mystic Falls high school. Everyone was ready to take down Klaus. But then Katherine found out that if Damon tried to permanently kill Klaus or succeed, then Klaus' hybrids would finish off Damon. So, she had a heart to heart with Stefan, telling him to "care enough to save Damon's life."
When it came to that point, Damon didn't succeed, because Stefan stopped him, saving both Klaus and Damon. And for that, Klaus released him from his compulsion. Stefan was free, humanity switch back on.
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Defining Moments
FanfictionFor those who are datherine fans, here is a look at what could have been if Katherine hadn't told him that she never loved him.