The Daleks have just destroyed Salus Kade's ship with an experimental weapon code-named Dead Hand -- just as General Landen expected. And, also as she'd expected, Kade was prepared for anything, and the Fearless had already donned their Spacer suits before their ship was blown apart. The Spacers jet across to the Dalek ship, destroy most of its trans-solar disc escort, board the ship and fight their way to the control centre, suffering losses on the way but winning the battle. A single Dalek survives, but is too badly damaged to defend itself; at Fisk's suggestion, Kade removes its weapon but lets it live so it can be interrogated later. Fisk and Kennedy begin trying to override the ship's security lockouts so they can pilot the ship back to Kedru 7 and contact the fleet -- but as they work, they see that two of the ship's escorts survived the earlier attack and are heading directly for the planet.

Despite the apparent loss of the Fearless, Landen orders the shaken General Croft to press home the attack on the main fleet, and calls the reserve flotilla out of Kedru 7 orbit to press home their tactical advantage. She then visits ops personally to ask Lt Carlisle if he's received any word from Kade's squadron, and although the answer is negative, she still seems confident that Kade has survived and will soon be in control of the Dead Hand ship. She thus returns to her cabin to report to Ernst Tanlee, the head of Earth Alliance security, that all appears to be going according to plan. She and Tanlee have been working on the same operation, and since Tanlee's agent hasn't succeeded yet, Landen has decided to approach the problem from another angle. As she speaks, Carlisle calls her from ops, reporting that the Dead Hand and two trans-solar discs are heading towards Kedru 7... and because Landen ordered the reserve flotilla to join the main fleet, the planet is undefended.

Fisk discovers that Kedru 7 is defenceless, and picks up a signal transmitting from the Dead Hand ship to the trans-solar discs. Kade realises that the surviving Dalek has sent instructions to its surviving escort, but it refuses to tell him what they're doing. Frantic, Kade orders Fisk and Kennedy to get more power to the engines and ram the discs if necessary to stop them, but one of the discs turns back and rams the Dead Hand ship itself, slowing them down. It then turns back and joins the other disc, boosting its engines to maximum speed. Both Kennedy on the Dead Hand and Carlisle in EA ops detect an enormous power build-up from the discs, and realise what they're doing: the discs have enough power to travel between star systems without refuelling, and they're about to unleash all that power on Kedru 7 in a single destructive kamikaze blast.

The Dalek aboard the Dead Hand ship stops transmitting, its work complete, and Landen manages to get a message through to the ship, ordering Kade to turn back. He refuses to do so and puts a gun to the Dalek's casing, demanding that it stop its comrades, but it's too late; the Dalek trans-solar discs descend into the atmosphere of Kedru 7 and detonate their drive systems. The planet's civilian population, including Kade's wife Lajitta and their daughter, have retreated into air-raid shelters, but the blast is powerful enough to burn off the planet's entire atmosphere. The operations platform in orbit is caught in the shockwave, but survives... but there's nobody left alive on Kedru 7.

The loss of his wife and daughter sends Kade into a downward spiral, and he rejects his friends, starts drinking, and puts thirteen MPs in hospital when they try to take him down during a pub brawl. Landen visits him in hospital after the fight, and tells him that she knows exactly how much he's suffering -- and now he has to decide whether to let that pain kill him or turn it to constructive use. He silently attends an informal briefing with Landen, in which she reveals that he's been promoted to Commander and gives him a new mission. Susan Mendes, the Angel of Mercy, has been travelling from world to world in the Dalek Empire, spreading a message of hope that keeps the Daleks' slaves content and working at top efficiency. This means that the Daleks can afford to put all of their military effort into front-line assaults rather than wasting energy putting down rebellions in their Empire, and that the slaves are working hard to replace every spacecraft that the Daleks lose in battle. The Earth Alliance won the battle at Kedru 7 thanks to Kade, but it was a Pyrrhic victory that they can't afford to press home; thanks to the Angel of Mercy, everyone who died at Kedru 7 died for nothing. Susan Mendes is the one person most responsible for the fact that the Daleks are winning this war, and Landen wants Kade to undertake a mission that will change that...

Elsewhere, the three crewmembers of the former passenger liner Amorist -- Captain Avers, Kenzie the navigator, and former hospitality officer Ollander -- wait nervously for a rendezvous with the Daleks, who will be using the Amorist to transport the Angel of Mercy on a covert operation. Ollander heads down to the airlock to greet the Angel of Mercy as she boards the ship, while Avers and Kenzie remain on the bridge. To their surprise, most of the Dalek escort leaves once the Angel of Mercy has boarded; only six Daleks remain on board the Amorist with her. One of the Daleks heads for the bridge to reprogram the flight computers, and Kenzie realises that this reprogramming makes him and Avers redundant. After a moment's hesitation, they make a run for it, escaping while the Dalek navigator is occupied. But Avers and Kenzie realise that they won't be able to hide for long, even from only six Daleks -- and even if they do manage to reach the escape pods, it's unlikely that they'll be able to make it to safety.

Ollander bursts into tears as Susan Mendes boards the ship, overwhelmed with gratitude for all that the Angel of Mercy has done. Suz kindly engages Ollander in a conversation about the ship as Ollander leads her to her quarters, the former VIP suite. Seeing that Ollander is terrified of the Dalek escort, Suz orders it to leave them alone, and to Ollander's surprise, it obeys. Suz tells Ollander that they should get to know each other, since they're going to spend most of the journey together, but when she asks Ollander her first name, Ollander bursts into tears again. The Daleks tortured her when she was captured, and they've taken away the memory of her first name. Despite Ollander's tragic story, Suz remains bright and optimistic, and even tells Ollander to call her Suz. She does seem to have doubts about whether she's really helping to make things better, but Ollander firmly tells her that she and Kalendorf are doing good work, especially Kalendorf -- although Ollander, frightened that the Daleks might be listening in, doesn't explicitly say what that work is. A Dalek then arrives and orders Ollander to come to the bridge; Suz orders that Ollander must not be harmed, and again, Ollander is surprised when the Dalek listens and obeys.

Avers and Kenzie are trying to avoid the Daleks, but both know that it will take only one bit of bad luck to get them both killed. Avers used to fight the Daleks until he was captured and became their slave, and he knows just how dangerous they can be. Hiding in the ductwork, he and Kenzie see Ollander leaving the VIP suite with a Dalek escort, and it occurs to Kenzie that they've got an opportunity here; given that they're probably doomed anyway, they might as well risk staying on board the ship and trying to find out what the Daleks have planned. Meanwhile, Ollander arrives on the bridge, where the Daleks tell her that they need a human voice to confirm their identity as they pass the Earth Alliance's automatic checkpoint beacons. Ollander realises that Avers and Kenzie must be dead, and tries standing up to the Daleks, reasoning that they need her alive to fool the EA beacons. But the Dalek commander offers to return her name. Right now, the name "Esther" is just meaningless sounds to her, but if she obeys the Daleks, they will release the mental blocks preventing her from understanding and remembering it. Crying, she thanks them.