I found it harder to make some of the choices here. The season as a whole is definitely stronger than season 1 in my view and has very few clunkers. There's some middle-of-the-road episodes where I had a hard time figuring out where to put them.
Here's my pick with some brief explanations:
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The Homecoming/The Circle/The Siege: A very powerful opening to the season IMHO that picks up where the season 1 finale ended (or a little after that). If there was only one thing to criticize about this, I think it's that there wasn't more follow up (there was quite a bit but I think there should have been more).
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Cardassians: Wonderful Garak and Cardassian centered episodes. You just gotta love the intrigue.
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Rules of Acquisition: I had a hard time with this one. I like the episode itself partly because I like Pel. What I'm not too happy with is the Dosi. I find them pretty ridiculous and not very alien most of the time. However, I think this is the first time we hear of the Dominion and I still remember wondering just what that mysterious power in the Gamma quadrant might be. Anyway, I think this episode is ok and so it just about made it into my list.
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Necessary Evil: A great, great episode for Odo and Kira that provides excellent background on what the occupation was like. This is one I definitely wouldn't want to miss.
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The Alternate: This is an episode I like but I have some problems with. I really like the background on Odo and the relationship between him and his researcher, Dr. Mora. What bothers me is that it seems like we're getting some hints on Odo's background in the Gamma quadrant and there's that mysterious relic but it all really turns out to be nothing more than a means of distracting viewers from the fact that Odo's the "monster". That's a shame and weakens the episode as a whole. But I still think it delivers enough character material to be worth while.
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Armageddon Game: A decent story but more importantly the real beginning of the great Bashir/O'Brien friendship. It's enjoyable mostly because the interaction between the two characters is terrific, I think. It's also great to see how far they've come since then.
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Whispers: Very, very enjoyable O'Brien episode that certainly left me guessing until the very end. Not your typical DS9 fare but very good nonetheless.
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Paradise: I've always liked this episode though I'll admit I didn't like it as much the last time I saw it. I'm really on the fence with this one as a consequence and might have just as well ended up excluding it. I like it mainly because of Sisko and the way he stands up for what he believes is right. I also think the confrontation with Alixus is very powerful. What I didn't like last time I watched and what had never struck me as strongly before was the way the people on the planet reacted to the revelation of the truth about how they got there in the first place. I KNOW they built a community which was important to them but I still think they should have been bloody mad at Alixus for what she did to them.
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Shadowplay: Here's one of those episodes that doesn't really stand out, that's not all that great but that you just like somehow. This is an episode I've always liked. I like the village, I like the villagers, I like the revelation and I like the way Dax and Odo deal with the situation. I especially like the attachment Odo develops especially to the little girl. It's an emotional side of his seldom to be seen. Again, I simply like this one and enjoy it every time.
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Profit and Loss: This isn't a great episode but I think it's enjoyable. More importantly, it starts off what would be the end of Cardassia as we had come to know it up until this point. It's also great to see the part Garak has in this, I think.
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Blood Oath: I'm not a big fan of this partly because I'm not entirely convinced Jadzia would actually go along with this but I do really like the three Klingon warriors. Kang, Koloth and Kor are just great to watch. I also love the fact that we're getting an idea of what it must be like to age in a society such as that of the Klingons. Not much fun, really. Not an essential episode but a good one, I think.
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The Maquis, 1 and 2: This has some really good material and performances, I think. Most Maquis stories on DS9 (if not all) were worthwhile and I feel this one is no different. What's really good here, I think, is that we really get to see all the different perspectives: Federation, Maquis and Cardassian. It's not an easy situation with no really easy way out.
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The Wire: A great Garak showcase with excellent use of Bashir as well. I don't think I need to add much more

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Crossover: This is where the mirror universe was still fun and interesting. The true core here is the interaction between the two Kiras which is just marvellously pulled off IMHO. The one complaint I have is the ending which just seems cut short to me.
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The Collaborator: This is probably one of my favorite episodes of the season. I think the revelation about Opaka is fantastic and I just love the predicaments Bareil and Kira find themselves in. Oh, and it remains credible yet still unbelievable to see Winn become Kai

. There's some very strong Bajor material especially in seasons 1 and 2 - and this is definitely one of the strong ones, I think.
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Tribunal: I used to like this more than I do today but I still think it's a good episode. It certainly showcases the Cardassians' arrogance very well. I also love the look on the judge's face when Sisko brings in the spy. I think this one suffers from being about too little, having too little weight in the greater scheme of things. Yes, there's many episodes like that in the season but I think there'd simply have been quite an opportunity here with the Cardassians.
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The Jem'Hadar: This is another episode I liked more back in the day but I still enjoy it and I still think the destruction of the Odyssey is very powerful indeed. What bothers me is the way Sisko and company just happily camp on some random planet in the Gamma quadrant (that seems pretty reckless to me) as well as the fact that some of the things we saw here were scaled back. This includes the Vorta's "powerball" as well as the Jem'Hadars' ability to beam from very, very far aways as well as just walk through forcefields. I think they were simply set up as too strong here which made scaling down necessary later on. I don't miss the "powerball", by the way. That could have been left out right from the start in my view.
And here's the ones I've dropped:
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Invasive Procedures: Not a bad episode as such, and I hate leaving it out because it does have some interesting Dax material. However, I feel it's necessary to do without it for the sake of Quark and Odo. I think they went too far with Quark here. Yes he schemes, yes he lies but I don't feel he'd do this to Sisko and the others. Also, there's no way they could have forgiven him for this the way they did. And as for Odo, I think he comes across as rather stupid in the beginning. Quark is supposed to be meditating or praying in one of the airlocks and Odo doesn't even bother to briefly step in and take one look around?
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Melora: I cannot stand the character of Melora. I see the point they're trying to make here but she just ends up coming across as not at all likeable, I think which just guts the whole episode. I also don't like the love story angle which simply wasn't necessary or believable IMHO.
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Second Sight: Yawn. That sums it up, really.
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Sanctuary: I really hate the Skrreeans with a passion. They're so incredibly annoying, stupid and ungrateful, I rejoice every time the one guy blows up with his ship. And that's not a good sign when you're supposed to feel sympathy for these people.
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Rivals: I actually find this one enjoyable enough but it just doesn't quite do the trick in the end, I think. Plus the premise is really silly (ironically, that's part of what makes it fun).
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Playing God: Again, sadly, this is a Dax story I feel I need to drop though it's a much closer call on this one. Ask me some other time, and I'd possible include it. What bothers me here is threefold: I don't like the initiate, I think the way Dax is portrayed is overdone in order to drive home the point and I wish the writers hadn't seen the need to include the whole thing about that mini universe and the high stakes involved which just seemed pretty far fetched and unnecessary to me.
So, as a whole, I'd only drop about 6 out of 26 episodes which really is quite good, I think. Again, as with season 1, I think dropping certain episodes would help make the season more focussed. The storylines that really stand out here are those of Bajor and Cardassia.