At the end of The Lighting Thief, Percy gives Sally (his mom) Medusa's head and she turns Gabe to stone. Also, she hints in her letter to Percy that she sold the stone (Gabe) as a statue and got enough money for a new apartment and a deposit on his new school.
The Battle of the Labyrinth (SPOILER ALERT!):
After being attacked by empousai cheerleaders at his new school, Goode, Percy returns to Camp Half-Blood and learns about "The Labyrinth", part of the palace of King Minos in Crete that, according to Greek mythology, was designed by Daedalus. During a game at the camp, Annabeth and Percy find an entrance into the Labyrinth. Percy soon learns that Luke had used the entrance and will lead his army through the Labyrinth straight in to the heart of camp Half-Blood. To get into the Labyrinth, Percy has to find the Delta Symbol (Δ) on a passageway, touch it, and then enter the Labyrinth
Using the Labyrinth, Percy has to try to find Daedalus so Luke cannot get Ariadne's string, thereby foiling Luke's invasion. Ariadne's string is used to find all the exits of the Labrinth. According to Greek mythology, Ariadne gave that string to Theseus to lead him out of the Labyrinth. Percy gets the help he needs from a mortal girl named Rachel Elizabeth Dare, who proves herself by hitting Kronos in the eye with a blue plastic hairbrush. Kronos finds out that Nico di Angelo is a son of Hades and also could be the child of the prophecy. Luke reaches Daedalus and gets Ariadne's string. Using the magical instrument, he leads his army and attacks camp. Grover comes to the rescue and causes a Panic to scare away the enemy. After the battle, Daedalus sacrifices himself to close the labyrinth, which is tied to his life.