The damaged TARDIS requires fresh organic material with which to repair its link to the Eye of Harmony, and the silver cat thus leaps onto the console and causes the TARDIS to materialise in the small Welsh village of Llanfer Ceirog. The Doctor has been here before, and after greeting the local resident Old Davy, he takes Ace to meet his old friends Hugh and Janet. He and Ace need a rest, and Hugh and Janet agree to put them up for a few days. Ace sets off to explore and finds a stone circle on Emrys Hughes’ land, but the sullen Hughes drives her off at gunpoint before she can get a good look at it. The Doctor becomes interested when Hugh and Janet tell him that a village named Dinorben was once located on Hughes’ land, and that it vanished without a trace centuries ago. The Doctor and Ace go to spy on Hughes after dark, and see flickering lights appearing in the stone circle; it seems as though torches are being ignited, but the Doctor suspects there is another explanation for their sudden appearance. He and Ace return to the farm, and arrive just in time to see one of Hugh’s sheep being carried off by a wolf -- of a kind which has not existed in this part of the country for centuries.

While supervising a foaling at a nearby farm, veterinarian Stuart Taylor sees a gruesome wound in the mare’s forehead and finds a tapering horn lying in the hay. Unsure what to make of his find, he decides to respond to an ad in his trade paper calling for sightings of odd animals to be reported to Inspector Graham Stevens of Scotland Yard’s Paranormal Investigations Division. Stevens is currently investigating a new community which has sprung up in London, consisting of people who seem to have appeared from nowhere and who refuse to discuss their background with outsiders. His only lead so far is a coach crash on the M40, in which the driver and all of his passengers were killed. The passengers were all dressed in newly-purchased, generic clothing, and carried briefcases full of money, and despite the fact that some bore a peculiar birthmark on their necks, only the driver could be identified -- Selwyn Hughes of Llanfer Ceirog, brother of the coach’s owner, Emrys. Stevens travels to Llanfer Ceirog to investigate the possible unicorn sighting in person and find out if there is a connection, but when he arrives he finds that Taylor has vanished. He gets no help from the obstructive local constable, a man named Hughes who denies any relationship to either Selwyn or Emrys.

The Doctor and Ace wait until dawn to return to the stone circle, where the Doctor finds prints from primitive hobnailed boots, as well as tyre tracks which lead directly into the circle and then abruptly vanish. The stone circle is in fact a silicorganic transmat terminal, but before the Doctor can warn Ace she passes through its focus and both she and the Doctor are transported to the distant planet of Tir na n-Óg. There, they are captured by human soldiers and examined for the witch mark, and once they are determined to be clean they are brought before the ruling council of the land, the Tuatha de Danaan. The head of the council, Dryfid, explains that his world’s sun, Dagda’s Wheel, was recently extinguished, plunging the land into darkness lit only by the dim and distant Arawn’s Wheel. General Nuada was sent to petition the god Goibhnie, but returned alone, reporting that the god had released a swarm of demons and chortled with glee as Nuada’s men were devoured. Ever since then, demons have stalked the land, taking on human form and killing at will; the only way they can be distinguished from true humans is by the witch mark on their necks. The Tuatha intend to evacuate their people to Earth through the circle, but to avoid drawing the attention of Earth’s authorities they have forbidden the other species of the planet -- centaurs, unicorns, and a race of elven creatures called the Sidhe -- from accompanying them. As a result, the city of Dinorben is under siege from species desperate to escape from their dying world. The Doctor and Ace cannot be allowed to take their story back to Earth, and thus will not be permitted to return -- unless they can learn why Goibhnie has turned his back on his people, and convince him to restore Dagda’s Wheel.

Two young American hitch-hikers, Jack and David, arrive in Llanfer Ceirog, which David once visited as a child. While looking for a place to set up camp in the forest, they find a dying centaur who managed to breach the walls of Dinorben and escape from his pursuers. Jack returns to the village to fetch help, but when he tells his story to Constable Hughes, Hughes takes a can of gasoline and burns the centaur alive, claiming that it was an escaped reject from an experimental government facility. Jack and David, furious, vow to remain and learn the truth, but that night they are attacked by hooded figures while bedding down in a nearby field, and David is kidnapped and bundled into a waiting van. Jack runs into Stevens while chasing the van, and the two of them see it stop briefly at Constable Hughes’ home; however, when they lose the van and return to question the constable, he claims to have been home alone all night. Jack takes Stevens back to the area where they found the centaur, and they arrive just in time to see the hooded figures preparing to burn David at the stake. They frighten off the figures and release the rattled David, who shows them a birthmark on his neck which seemed to infuriate the figures. Stevens tries to force Hughes to take an interest -- but realises he will get nowhere when he sees a hooded robe in the constable’s living room. Meanwhile, Hugh and Janet are appalled when Ace and the Doctor stumble into their cottage, dressed in sackcloth and suffering from exposure -- but these are in fact shape-shifting demons, who lull Hugh and Janet into a false sense of security, and then drain the life force from them and take on their forms.

The Doctor and Ace set off on their quest, but outside the city walls they are confronted by an army of centaurs. Fortunately, the Firbolg are honourable creatures, and once the Doctor has explained himself he and Ace are allowed to pass. In a deserted farm they meet Bathsheba, or Bats, a crippled young girl whose entire family was killed by demons while she was collecting firewood. The Doctor allows Bats to join them, and as they continue on, they meet the forest spirit Herne, a glowing figure who apologises to the Doctor for the wrong he will soon do him; he has accepted his transformation now, and knows that the Doctor did what he felt was right. Some time later, they are taken prisoner by the Sidhe, fox-like beings who blame the humans for all that has happened to their world; however, before they can execute their prisoners, some unseen force attacks the camp, and as the Sidhe fight for their lives the Doctor and his friends are able to escape.

The Doctor, Ace and Bats are attacked by a demon, but are rescued by the human Chulainn, who is taking his people to Dinorben for the evacuation. The Doctor, fearing that the journey will place his friends in too much danger, asks Chulainn to watch over them while he continues on alone. He slips away while Ace sleeps, but Bats sees him leaving and sets off after him, and by the time he realises he’s being followed it’s too late to return. Ace awakens and is infuriated to learn that the Doctor has abandoned her, but although she sets off after him immediately he is too far ahead. Chulainn catches up to her and convinces her to return to the camp with him, but in their absence the camp is attacked by demons, and they arrive to find that Chulainn’s people have been slaughtered. The grieving Chulainn burns the bodies of the dead, but leaves those with the witch mark to rot.

As Chulainn and Ace prepare to return to Dinorben, Ace is contacted by Bat, a young unicorn who has taken on her friend Bathsheba’s name. The unicorns’ horns are an extension of the brain, granting the unicorns telepathy and greater intelligence than mere horses, and enabling Bat to convey her peaceful intentions to Ace. Chulainn, however, refuses to have anything to do with non-humans, grouping them all together with the demons who killed his people. Ace, disgusted, abandons him and sets off back to Dinorben with the unicorns. On the way, they encounter Herne, who appears to be dying; however, he has an odd relationship with Time, and as he dies his body is radiating anti-chronons which cause ordinary beings to age in reverse when they try to approach him. Ace realises that it was Herne who attacked the Sidhe camp, possibly trying to kill the Doctor for the reasons he alluded to earlier. Unable to help him, Ace and the unicorns continue on to Dinorben, where Ace hopes to break through the blockade, get the unicorns to Earth, and alert the authorities. If the secret evacuation is exposed, the Tuatha will have no choice but to negotiate the evacuation of Tir na n-Óg’s other species as well as their own.

The Doctor and Bats encounter a group of Firbolg led by the boisterous Daffyr, and meet Stuart Taylor, who crossed over to Tir na n-Óg under the hypnotic influence of the unicorn’s horn and was sent on the same quest to find Goibhnie. He at least has a car, and although it is running low on petrol, he takes the Doctor and Bats to the coast to see Goibhnie’s island -- from a distance, as they are attacked by demons when they try to get closer. The Doctor recognises the twin towers on Goibhnie’s island as intergalactic transmitters, and as he tries to work out how to contact the “god”, a low-flying dragon buzzes the Firbolg camp. Daffyr brings it down with an arrow to the eye, and the Doctor, questioning its improbable abilities to fly and breathe fire, examines it and finds that it is in fact a biomechanoid with a positronic brain. He removes the brain and wires it up to Taylor’s car radio, and then has Taylor drive him and Bats back to the coast, where he transmits an intergalactic distress call towards the island. The demons attack again, but this time Goibhnie himself arrives to drive them off and to investigate the Doctor’s call…

Upon arriving at Dinorben, Ace blows a hole in the city wall with her nitro-nine, choosing an easily-defended section so the city will not be overrun. She leads the unicorn herd through the startled and unprepared city defenders, to the stone circle and hence on to Earth. Jack, David and Stevens have gone to Emrys’ land to demand answers, and get more than they bargained for when Ace and the unicorns arrive. But the defenders of Dinorben recover from the shock more quickly than Ace had expected, and as she tries to explain the situation to Stevens, soldiers from Dinorben arrive and arrest them all. Ace, Jack, David and Stevens are taken back to the city as prisoners, where Chulainn, who has finally arrived on his own, angrily accuses Ace of consorting with witches. The protesting Ace collapses in agony as her telepathic link with Bat is severed; the frightened and angry humans have cut off the unicorns’ horns, reducing them to nothing more than a herd of white horses.

Goibhnie takes the Doctor, Bats and Taylor to his island, where, as the Doctor had suspected, he is revealed to be a Troifran scientist conducting an experiment to see how humans would react in a world populated by creatures from their mythology. The “witch mark” is an identification code for the creatures manufactured in Goibhnie’s laboratory, and Dagda’s Wheel is an artificial sun which has run out of fuel, bringing the experiment to an end. The demons are in fact rejects from Goibhnie’s experiments, which escaped from their restraints while Goibhnie was occupied with his preparations for departure. The Doctor realises that, despite himself, Goibhnie has developed some affection for his subjects over the centuries, and was unaware of the extent of the disaster that had struck his land. The Doctor thus convinces him to refuel Dagda’s Wheel and allow the experiment to continue in his absence.

The sun is thus restored to Tir na n-Óg, but as its people celebrate, Ace discovers that General Nuada -- the man who claimed that Goibhnie had deliberately loosed the demons upon them -- is himself a shape-shifter. Under cover of the evacuation, Nuada has been permitting demons to slip through to Earth. Realising that his plans are endangered by Goibhnie’s return, Nuada sends a telepathic call summoning his fellow demons to Dinorben, to overrun the city and invade the Earth en masse. To his surprise, David finds himself drawn to Nuada by the call, and finds that he too is possessed by a demon, which attacked him as a child when he and his family went camping near Llanfer Ceirog.

Goibhnie returns to Dinorben to apologise for his neglect and offer his assistance as the demon army approaches. Nuada takes Ace and Jack hostage and tries to open an undefended gate to let the demons in, and when Goibhnie and the Doctor try to stop him, Nuada transforms into a demon and attacks Goibhnie, fatally injuring him. David, still struggling to retain control of his mind, transforms into a demon himself, kills Nuada, and then collapses, restored to human form. The Doctor stops the frightened Tuatha from killing David, and the dying Goibhnie, accepting responsibility for his creations, removes the power pack from his life support unit and gives it to the Doctor. The Doctor repositions the stones from the circle about the open gate, and uses Goibhnie’s power pack to activate them; thus, when the demons pour through they are transported directly into Dagda’s Wheel, providing the artificial sun with fuel for centuries to come.

Herne runs backwards out of the forest and collapses at the feet of the Doctor, the only person who can survive exposure to the anti-chronons radiating from him. Before returning to Earth with Herne, the Doctor uses fire to expel the demonic protoplasm from David’s body; however, it is too dangerous for him to use in the TARDIS, and he must burn it. Dryfid adopts Bats as his own daughter and allows the others to return to Earth before destroying the stone circle. Back on Earth, the unicorns are recovering from their mutilation, and the Doctor promises to contact UNIT and ensure that they are not disturbed when their horns grow back. He and Ace then carry the dying Herne back to the TARDIS, and the Doctor enlists Old Davy’s help on the way -- but once inside the TARDIS, Old Davy’s body merges with Herne’s, creating a mass of raw protoplasm which the silver cat begins to install in the TARDIS. Old Davy will live the rest of his life out backwards as Herne, and although at first he will blame the Doctor for his transformation and try to kill him, he will soon calm down and realise the benefits of his new existence. As the TARDIS finally returns to normal, the Doctor hands up his coat and shuts down the protocols generating the cat -- unaware that a speck of demonic protoplasm which spattered onto his coat while he exorcised David has contaminated the organic material used to repair the TARDIS…