For some, this story begins when the USS Westmoreland shoots down an unidentified flying object which did not respond to its hails. For Sarah Jane Smith, an unrelated incident in March 1997 introduces her to an American named Tom Ryder, who will play an important role in later events. Sarah’s recent article on the Thai criminal underworld has made her a number of enemies, and she is kidnapped from Bangkok airport, the intention being to drop her out of a helicopter into the sea. Tom, who had identified himself to Sarah as a freelance photographer, is also kidnapped when he tries to intervene. Later, he will claim that after the kidnappers threw Sarah out of the helicopter, he single-handedly overpowered them, threw two parachutes out of the helicopter and leapt out after them, turned and gunned down the helicopter, and then caught the falling parachutes and put them on himself and Sarah in mid-air, saving her life. This is how he will describe it when he needs to believe he used to be a hero...

April, 1997. Hong Kong will soon be handed over to China, but the Triads are still at work in the city. Hong Yi Chung and Ah Fei are 49s, footsoldiers for the Tao Te Lung, who are sent to the home of one Ah Wing to punish him for failing to meet his outstanding debts; however, when they arrive, all that’s left of Ah Wing is a scorch mark and a few ashes in the middle of the apartment. Sickened, Yi Chung unthinkingly grabs the nearest solid object -- a strange metal box with no apparent seams or openings -- and takes it with him. Later, as he recovers from the shock, he works up the courage to ask the beautiful Emily Ko out on a date, and despite a mildly disastrous first encounter she eventually accepts. While preparing for their date, Yi Chung examines the strange box, and is surprised when something gives under his thumb. He can see no change, but the box is now transmitting, and someone or something is tracing it.

Inspector Katie Siao and her partner Mark Sing are assigned to investigate Ah Wing’s death, and are surprised when two UNIT-SEA (South-East Asia) officers show up at the crime scene. Colonel Tsang and Lieutenant Nomura claim that Ah Wing was already under surveillance, but they won’t explain why, and Siao refuses to let them in on the investigation. Forensic analysis indicates that Ah Wing was incinerated by a heat twice as great as that of any crematorium, but there is no sign of arson in the apartment; either Ah Wing burned by himself or he was killed somewhere else and the remains dumped. Siao and Sing return to the crime scene, where they encounter a Caucasian man with a question-mark umbrella, a tweed pullover and a Scottish accent. Somehow, Siao finds herself unable to stop him from walking out, although before leaving he does advise her and Sing to check the door for fingerprints.

Two Australian students, Kurt Williams and Danny Taylor, are backpacking in Cambodia, where they decide to hike through a region rumoured to be haunted. They are unaware that they’re being observed by a UNIT team led by Major Russell Barry and Lieutenant Fiona Clark. Barry assigns his men Gibson and Harris to observe the students, and their local guide Tranh points out the best route to take. Just as Barry had expected, Kurt and Danny are abducted by aliens, but Gibson and Harris do not intervene; Barry is planning to lead his own team into the shadow territory and doesn’t want to give away his presence. As the team approaches the alien zone, they find an illegal Khmer Rouge logging camp, and Barry has his men capture it, intending to use it as a convenient base. Clark suspects that he just wanted to shelter indoors, but she supports his decision in public to avoid causing friction within the team. Meanwhile, Kurt and Danny are subjected to experiments and genetic modification, and awaken back in their hostel in Cambodia with no memory of what has happened.

Sarah arrives in Hong Kong to research an article about the handover. The first company on her itinerary is Pimms Shipping, an import-export business in an ultra-modern skyscraper, although she’s not quite sure how it ended up on her list. She is taken aback to see a police box in the building’s rock garden, but the PR manager, Yue Hwa, explains that it’s part of the owner’s private art collection. As the suspicious security chief, Tse Hung, watches, Yue Hwa takes Sarah to meet the owner of Pimms Shipping -- Pendragon, a friendly little man with a Scottish accent, who dresses in a tweed pullover. The interview goes well, and Sarah returns to her hotel, unaware that Tom Ryder is keeping her under surveillance -- or that “Pendragon” was her old friend, the Doctor.

The crew of the Russian submarine Zhukov trace an external radiation source to a strange ore deposit sticking out of the sea bed. The seaman sent to investigate returns with a sample of the strange metal ore, which has not corroded and which feels as light and flexible as plastic -- in fact, it’s the same metal which was used to construct the box Yi Chung is now carrying. One of the sub’s crew, Lieutenant Morozich, contacts a representative of the Russian Mafia and sells him both the ore sample and the naval charts indicating where it was found. Borisovich has recently received an e-mail from Lung Tau, head of the Tao Te Lung, who has asked all of his world-wide criminal contacts to keep an eye out for such metals; Borisovich thus contacts the Tao Te Lung and schedules an appointment to sell them his acquisition.

Yi Chung and Emily Ko are attacked by aliens while parked in a secluded area outside the city. The aliens are driven off when another car approaches, and Yi Chung and Emily flee back to the city. Yi Chung is so shaken that he actually reports the incident to the police; they don’t believe him, but Siao passes on the report to UNIT to keep them out of her hair, and UNIT takes it very seriously. Meanwhile, Yi Chung recalls seeing Sarah at her hotel, and, recognising her from the recent publicity over the Thailand incident, he contacts her and tells her his story. He gives her the strange box which he found in Ah Wing’s apartment, and takes her there to see it for herself, but UNIT has been keeping the apartment under surveillance and they are both identified when they enter. Tsang sends Nomura to bring them in for questioning, but Yi Chung panics and flees when the UNIT troops arrive. Sarah goes along willingly, but is puzzled when Tsang questions her about the Doctor’s activities. She is startled when Tsang reveals that the Doctor is Pendragon -- and horrified when Tsang also reveals that Pendragon is Lung Tau, the Dragon’s Head, the head of the Tao Te Lung. Sarah hands over the box which Yi Chung had given to her, but she can’t believe that the Doctor she once knew could be the head of a criminal gang involved in smuggling, extortion and murder.

The police identify the fingerprints on Ah Wing’s door as Yi Chung’s, and Sing and Siao go to Yi Chung’s apartment; however, they receive the information separately, which will cause some heartache later when they realise why. A tragedy of errors ensues as the police try to bring in Yi Chung for questioning. He is already fleeing, having assumed that the UNIT operatives at Ah Wing’s apartment were trying to arrest him. Thus, the police assume that he’s fleeing from them, and try to block his escape, causing him to crash his car into theirs. He is trapped by his car’s airbag, and when he cuts himself free, the police mistake the sound of the popping airbag for a gunshot and open fire. Yi Chung returns fire and the police shoot him dead. When Sarah hears about the death on the news, she concludes that Yi Chung, like Ah Wing, must be dead because of the mysterious box which UNIT was interested in -- which means that the Doctor is involved in something truly dangerous.

The Doctor is infuriated when he learns of Yi Chung’s death, but Tse Hung assures him that it was indeed the accident it appears to be. Tse Hung is more concerned by the fact that before his death Yi Chung spoke to the same reporter who had visited the Pimms Building, and decides to kill her. The Doctor refuses, but agrees to let him scare her off, without realising what this means until Yue Hwa gets a chance to speak to him privately; the “traditional scare” is a gang-rape by 49s. The Doctor can’t retract the order, for fear of losing face and destroying everything he and Yue Hwa have worked for; he thus goes to Sarah’s hotel himself, confronts Ah Fei and the other 49s and uses bluff and intimidation to drive them off. The fact that Tom is standing behind the Doctor with a gun helps to convince the bemused 49s to retreat, but the Doctor slips away before Tom -- who knows his true identity -- can confront him.

The Doctor discusses matters with his ally Chiu, who has the appearance of a blond, purple-eyed Chinese man. Chiu’s people are stuck on Earth, and they have failed to recover the transponder which Yi Chung had stolen. When Tse Hung reports this to the Doctor, he’s surprised to find that the Doctor already knows; and when Ah Fei reports his failure to “scare” Sarah, Tse Hung recognises his description of the man who drove him off, and concludes that Pendragon is trying to subvert his authority in order to replace him with someone else. He warns Yue Hwa of the danger; they will have to act against Pendragon before he acts against them. Unaware that Yue Hwa in fact has his own agenda, Tse Hung takes care of personal business, visting his senile father in a rest home and arranging to sell his lover Bonnie Ling to her new beau, a software engineer who is contemptuous of Tse Hung’s way of life. To his surprise, Tse Hung realises that he’s going to miss her. But there is still work to take care of, and Tse Hung thus visits the Club Shanghai, where he murders Borisovich and steals the ore sample and naval charts which Borisovich intended to sell to him.

The box which Sarah gave to Colonel Tsang, or a similar one, is delivered to Barry’s team, who use it to complete their mission. For some time now UNIT has been aware of UFO flights between Cambodia and Hong Kong, and they fear that the aliens intend to interfere with the handover. Barry’s team find the Cambodian zone protected by a force field, but Julie Palmer uses the box to detect the UFOs’ transponder codes and predict the next one in the sequence. Before the UNIT team can take advantage of this discovery, Barry and Clark catch Tranh apparently talking to himself on the edge of the camp; when they confront him, he claims he was dreaming of silver spaceships which appeared in the sky during the war, and when they press him for details, he spontaneously combusts, leaving only a scorch mark and a few ashes. Despite the danger that Tranh may have betrayed them, albeit unwillingly, Barry and his team press ahead into the alien sector. Later, they report finding nothing but an abandoned plantation; either the aliens had evacuated before their arrival or this area is just a convenient marker for orbital flights. But their report will make no mention of the fact that the team members had trouble sleeping when they returned to base camp...

Sarah breaks into Yi Chung’s apartment, and finds evidence connecting him to the Pimms Shipping block at Kwai Chung port. Colonel Tsang arranges for Sarah to interview the port authority, but while she’s doing so Sarah overhears Nomura mention something called the “Cortez Project”, which Tsang doesn’t wish to discuss in front of Sarah. Leaving this for later, Sarah visits Kwai Chung, where she slips away from her guide to investigate the Pimms section; there, she is unexpected reunited with Tom Ryder, and watches with him as a flying saucer descends into the port to rendezvous with the Doctor and Chiu. It appears that the Doctor is trading Gallifreyan technology in exchange for the aliens’ help to transport arms and drugs via cloaked skiffs. Chiu spots Sarah and Tom, and although they escape, Chiu decides that Sarah must be killed to prevent her from telling her story. The Doctor is unable to convince him otherwise, until he offers an unpleasant alternative; nobody will listen to Sarah if she is publicly discredited.

Katie Siao is eating at home with her family when Mark Sing arrives with his fellow members of ICAC, the Independent Committee Against Corruption. He has confirmed that she did not learn about Yi Chung’s fingerprints from the forensics laboratory, and when he investigated further he found proof that she has been living beyond her means. When his team searches her house they find a stash of narcotics; Siao is a drugs courier for the Tao Te Lung, and Sing has no choice but to arrest her. However, when the drugs are analysed they prove to be a harmless opiate derivative -- a placebo which could be used to wean addicts off heavier drugs.

Tom takes Sarah to a suite at his hotel, explaining that the Tao Te Lung knows where she had been staying. He identifies himself as a member of the DEA, and explains that he was sent to arrest the Doctor; he’s been watching Sarah in the hope that she would stir things up and get where an ordinary investigator couldn’t. Sarah still holds out hope that the Doctor’s actions can be explained, and she promises to help Tom get to him. In Tom’s version of the story, he and Sarah spend the night making love, although Sarah only remembers giving him a fond peck on the cheek before going to bed alone. The next morning, she wakes to find her name in all the papers; someone has provided proof to the news agencies that she has reported alien encounters to government officials, and papers throughout the world are dropping her columns. Only the Doctor can have done this to her. Hurt and stunned, she gives Tom all of the information he needs to break into the Pimms Building -- not for revenge, but because she fears that a Doctor on the side of evil could be a greater threat to the world than any she’s faced before.

The Doctor now has more guilt to add to his already intolerable burden, but things are becoming critical; the Astrographer at the plantation house has detected battleships approaching Earth. They are now in what Yue Hwa calls “bullet time”, the period between the trigger being pulled and the bullets hitting their victim, when everything changes. The Doctor stays at the Pimms Building late, breaks into Tse Hung’s office, and finds the ore and charts which he has been looking for, proof that the ore is in the Persian Gulf. But as he’s working, Tom Ryder and his team break into the Building through the ground floor -- and Barry and his team break in via the roof, having decided to investigate the other end of the UFO flight paths. Both teams are expecting minimal resistance from security, which is in fact the case -- until the two teams meet each other in the computer suite. Each believes the other to be building security, and when a real security guard stumbles across the standoff and draws his gun, somebody on Tom’s team shoots him, provoking an exchange of gunfire.

The Doctor arrives in the computer suite and tries to put an end to the battle, claiming that this will all be over soon and that UNIT will only make things worse if they try to interfere, but Barry refuses to listen. Meanwhile, another security guard escapes to the roof and tries to call the police on his cell phone, but mistakes the hovering UNIT helicopter for a police chopper. The pilots, believing the guard to be one of the UNIT team, allow him on board before realising his mistake, and as they struggle, the helicopter crashes into the building, killing Clark and causing the gunfight to break out afresh. The Doctor saves Palmer’s life and flees to the TARDIS, and the UNIT team and Tom’s men finally manage to identify themselves to each other. This time, Tom claims to be working for the CIA. They realise that they have a common ally in Sarah, and decide to join forces against the Doctor and his alien allies.

Tse Hung blames the Doctor for the carnage at the Pimms Building, insisting that it could have been avoided if he had been allowed to kill Sarah. The Doctor accuses Tse Hung of holding back the information which the aliens need to get away from Earth, in order to keep them here longer and continue to profit by use of their skiffs. Tse Hung tries to kill the Doctor, but Yue Hwa stops him and places him under arrest; the Tao Te Lung is not a criminal Triad after all, but a trap set up by China’s Public Security Bureau to lure in potential kingpins and get rid of them before the handover. Yue Hwa is the real head of the Tao Te Lung; the Doctor was just using it as a convenient organisation to help the aliens, and pretended to be its head to keep attention away from Yue Hwa. The Doctor and Yue Hwa thus visit the police and claim that Katie Siao was aware of the Tao Te Lung’s true nature all along; this isn’t the case, but the Doctor has given her a second chance and trusts her not to waste it. Meanwhile, Tse Hung escapes from custody and sets off to exact revenge...

When the UNIT operatives study the files they stole from the Pimms Building mainframe, they are shocked to find up-to-date information on each member of Barry’s squad. Sarah realises that the plantation really is occupied after all, and that the team was brainwashed, interrogated and implanted with false memories to put them off the trail. But she is horrified when Tsang responds by launching a tactical nuclear strike on the plantation, using the transponder to get the missile through the force field and wiping out all remaining aliens along with any innocent civilians in the vicinity. Has UNIT become nothing more than a death squad?

Two UFOs managed to escape from the plantation before the attack, but the UNIT operatives were unable to trace their flight paths; however, Tse Hung then arrives and directs the UNIT team to the Persian Gulf, seeking revenge on the Doctor. Tsang calls ahead and arranges for the USS Westmoreland to provide support; Captain Davis believes that they’re on a retrieval mission, but he doesn’t know what they’ll really be retrieving. Before boarding, Tsang has a private chat with Sarah, believing that as she has now seen the Doctor’s true nature she will make a perfect recruit for the Cortez Project, a team operating under UNIT jurisdiction but without the knowledge or approval of UNIT HQ in Geneva. When Cortez arrived in America, the result was conflict between a technologically advanced society and a less developed one, and the Aztec civilisation was destroyed. The Cortez Project believes that all aliens, any aliens, are a threat to the well-being of the human race, whether they come in peace or not. Sarah realises that she’s in the company of fanatics dedicated to the extermination of all extra-terrestrials, friendly or otherwise, and she’s seen too much to be allowed to leave...

Yue Hwa accompanies the Doctor and Chiu to the Persian Gulf, where the Zhukov is waiting for them. Chiu’s people stun the crew of the Westmoreland, disable its systems, and take Sarah to their skiff, where the Doctor is waiting for her. He admits that he discredited her, but only because his allies would have killed her otherwise. The aliens originally came to Earth to recover technology lost by a previous invasion spearhead, but the Westmoreland shot them down. Most of the crew escaped via transference arches, but were unsure where their ship then ended up. The Doctor has been trying to help them find it so they can leave Earth, and to do that he needed the resources and secrecy which could only be provided by a criminal network. He arranged for Sarah to visit because he needed help, but by the time she arrived things were too complicated for him to control; not only was he trying to locate the aliens’ ship, he was trying to keep a handle on the Tao Te Lung’s criminal employees and prevent UNIT from making matters worse. In perceiving a threat where none exists, UNIT may end up creating one, for there are several battleships approaching the Earth -- reinforcements who will destroy the planet in retaliation if they believe that their people have been attacked.

Sarah still hasn’t forgiven the Doctor for what he did to her, but she accompanies him, Yue Hwa and Chiu to the alien ship. It has nearly repaired itself, and the Doctor uses Gallifreyan technology to speed up the repair process. However, Sarah still doesn’t trust the aliens, and even the Doctor is surprised to learn that they’ve been abducting backpackers and other humans, and converting them to Ph’Sor, alien/human hybrids. Chiu claims that they did so simply to put a network of allies in place on Earth should anything like this happen again; as long they are not needed, they will live out their ordinary human lives as though nothing had happened. But Sarah isn’t convinced that he’s telling the truth.

Tse Hung and Tom work together to escape from their captors, and while Tse Hung promptly makes a break for it, Tom frees the ship’s crew and the UNIT team, and they slaughter every alien on the ship. NORAD and CINCPAC have detected the alien battleships entering the atmosphere, and Tsang and her team thus take over the bridge; General Kyle’s orders are to destroy the aliens at all costs, and Tsang intends to ram the Westmoreland into the alien ship if it tries to escape. Captain Kutzov tries to block their path, but he’s misjudged the speed and distance and Tsang inadvertently rams the Zhukov, sinking it. The Doctor, Sarah and Yue Hwa, unaware of what’s happened, transfer up to the Westmoreland to get it out of the way, and Tom knocks out Yue Hwa and takes Sarah hostage, forcing his gun into her armpit and ordering the Doctor to surrender. He’s only bluffing -- he has no intention of hurting Sarah, or so he believes -- but he manages to convince both the Doctor and Sarah that he’s serious. Thus, the Doctor steps away from the Westmoreland’s conn -- and Sarah, knowing that the Doctor must do what he has to, grabs Tom’s hand and pulls the trigger herself, depriving Tom of his hostage.

The Doctor easily knocks out the horrified Tom with a nerve pinch, but unfortunately finds that he can’t direct the ship from here in any case. He thus frees the ship’s crew and, with their help, gets to CinC -- where he contacts Tsang and threatens to launch a nuclear missile into the heart of Tehran and trigger a world-wide bloodbath unless Tsang backs off. She believes that he’s serious, but she won’t compromise the Cortez Project, and she thus kills her fellow officers and then herself to prevent the Doctor and his allies from brainwashing them. Chiu’s saucer launches safely, and the aliens depart from the Earth; they will not return unless they are given cause to do so.