This chapter traces Sigmund Freud's reconceptualization of the idea of sexuality itself and link it with the unconscious and its processes, thus attending to one arm of his diagnostic fulcrum. It focuses on the other arm, the mechanisms of splitting. The fulcrum of diagnosis, aetiology, and mechanism of splitting, provided Freud with a direction for his investigation. As a practitioner in the field of nervous illnesses, Freud inherited the nosology that prevailed around about 1895, and, in addition, the accepted view of the aetiology of mental problems. Then, when Freud employs the concept of libido, he explains the psychoneuroses in terms of a failure of the libido to find satisfaction along normal lines. Within On Narcissism context he elaborates a schema of complex stages of development, one that involves the concept of narcissism understood as the libidinal complement to the egoism of the instinct of self-preservation.