Tomorrow, the British government will hand Hong Kong back over to China, but for some reason the Chinese government has chosen this time to test nuclear bombs in Inner Mongolia. Another test is scheduled for midnight on Handover Day, which seems almost like a deliberate provocation. Marcus and Adam aren’t paying much attention to the news, however, as Adam’s busy apologising to Ling for Marc’s boorish and drunken behaviour. The stranger from the police box tries to attract Ling’s attention by speaking in Cantonese, but Ling’s from Slough and doesn’t understand a word. Nevertheless, the stranger has recalled that he’s a doctor, or rather the Doctor -- and when Adam refers to the pub’s owner as “Brigadier,” the Doctor realises that he’s stumbled across an old friend.

Closing time arrives, and Adam puts the drunken Marcus in a cab and offers to walk Ling home. Lethbridge-Stewart locks up behind them, but then finds that the stranger has remained in the pub to speak privately with him. Lethbridge-Stewart doesn’t want to talk to anybody, but the stranger reminds him of the Yeti attack and gives him enough detail about the classified incident to convince Lethbridge-Stewart that, despite his changed appearance, this man may be the Doctor after all. However, Lethbridge-Stewart isn’t pleased by the reunion, as he’s been trying to put his old life behind him. When your job is to protect against the inexplicable, how do you explain that the only proof that you’ve done your job properly is that nothing strange has happened? Despite all his hard work and sacrifices, UNIT was always a laughingstock, and Lethbridge-Stewart eventually left England behind to start a new life elsewhere.

The Doctor admits that he’s in a similar situation, exiled by his “superiors” and trapped on Earth with an inhibitor placed in the TARDIS to prevent him from travelling through Time. As he and Lethbridge-Stewart leave the pub, however, a low-flying jet passes over the city, so close that it sets off car alarms at the waterfront -- but neither he nor Lethbridge-Stewart can see the actual plane. It seems to be heading for the hills, in the same direction in which Adam and Ling were heading, and Lethbridge-Stewart sets off to ensure that Ling is safe. The Doctor accompanies him, as if the plane is truly invisible, whoever is responsible may have the technology which the Doctor requires to repair his TARDIS and escape from Earth.

Ling and Adam have taken a “short cut” to a deserted part of the hillside, but before they can enjoy the benefits of being alone together, they hear a jet fly directly overhead and crash on the hillside nearby. Despite Ling’s protests, Adam rushes off to investigate and offer help, but there’s no sign of the plane at first -- until it suddenly crackles into sight as if from thin air. The Doctor and Lethbridge-Stewart arrive as the injured pilot stumbles out of the wreck; he speaks only in Mandarin, but the Doctor translates and informs the others that there was a passenger aboard. Adam sets off to search for the passenger, insisting upon doing all he can to help, although Ling doesn’t want to get involved in what can only turn into a political nightmare. A brief search turns up the passenger, who appears to be beyond help. He’s still alive, and Adam sends Ling back to fetch the Doctor while he soothes the injured man, telling him that help is on the way. But then something truly strange happens.

The Doctor is forced to render the injured pilot unconscious so he can recover. There seems to be no reason why the Chinese would want to sneak into Hong Kong when it’s about to be handed over to them, and the Doctor thus suspects that they’ve rather caught someone trying to sneak out of China. The authorities are on their way, but the first to arrive is a platoon of UNIT troops led by Colonel Brimmicombe-Wood, who places the area under security lockdown while his men scour the area for the “retro machine” and “Red Canary.” There’s no love lost between Wood and Lethbridge-Stewart, who is irritated when Wood orders him and the Doctor to remain in the area for a debriefing -- and prevents him from rushing off to investigate when Ling begins to scream in the distance.

Wood sends his men to investigate Ling’s screams and to secure the nearby Buddhist temple as a temporary field HQ. He then shows the Doctor and Lethbridge-Stewart a photograph of the man he was expecting to find on the hillside, but neither recognises him. However, Lethbridge-Stewart does recognise the name; this is General Ke Le, who defected from Europe 20 years ago to join the People’s Liberation Army. It seems that he’s trying to defect back. Wood sends the Doctor and Lethbridge-Stewart to the monastery, where the monks are chanting for world peace, and on the way, Lethbridge-Stewart explains that Ke Le is a scientist who fled from the West during the “plastic purges”. He’s notorious for inventing a “rehabilitation” process that transforms political prisoners into suicidal, zombie-like soldiers -- and he’s most likely responsible for the technology which rendered the jet plane invisible.

As Wood’s men transform the monks’ dormitory into their field HQ, Wood questions Lethbridge-Stewart about the Doctor. Lethbridge-Stewart wants to wash his hands of the whole affair, but when the hotline rings he automatically answers it, to Wood’s fury. The Chinese ambassador is on the other end and is extremely upset by what’s happening, but Wood doesn’t care; the island is still British for the next 21 hours, and he and his men have until midnight to get Ke Le and his “retro-gear” and get out before they’re officially on Chinese territory.

The Doctor speaks with the monastery’s abbot, who accepts the temporary invasion by Wood’s men with equanimity; this is the temple of Wu-wei, “the path of inaction,” and the monks believe in the principle of non-interference. Though polite, the Doctor admits that he can’t just stand by and do nothing as things go wrong. He also tells the Abbot that he’s visited China before, and is variously known as: “hu”, the tiger, for his courage; “hu”, the fox, for his cunning; or “xue,” “he who tends to the sick.”

Lethbridge-Stewart fetches the Doctor to speak with Wood, who needs him to wake the pilot so Wood can question him. Wood promises to send the injured man out to international waters for treatment once he’s learned what he needs to know, and the Doctor therefore applies Venusian acupressure to the pilot and remains to translate for Wood. The pilot desperately insists that he’s no spy, simply a soldier who was forced to obey Ke Le’s orders. To the Doctor and Wood’s surprise, it seems that Ke Le wasn’t trying to defect at all; he always intended to land here, although the crash was admittedly an accident. However, the Doctor can’t quite understand what it is that Ke Le intended to acquire at the monastery. The soldier seems to be speaking a word made up of other words, which translates roughly as “the thing that drains souls.”

Lethbridge-Stewart just wants to get back to running his pub, preferably before the tourists rush to the waterfront to see the fireworks at midnight. As he shares tea with the Abbot, he comments upon the other monks’ incessant chanting, and is surprised to learn that “incessant” is exactly the right word -- according to the Abbot, they’ve been chanting in shifts for nearly 150 years without fail. The Abbot shows Lethbridge-Stewart the room where the monks maintain their vigil, chanting prayers of peace to keep the sins of the world locked within the “soul jar” on their altar.

Ling wakes from a disturbed sleep, and the Doctor tries to calm her as she panics, looking for the missing Adam. She reveals that she and Adam found the badly injured passenger last night, but when she went to find the Doctor she heard Adam yell for help -- and when she went back to investigate, she found that the passenger had changed. Outside, Wood sends the injured pilot out to international waters along with the stealth technology his men recovered from the plane; however, there’s still no sign of Ke Le, and the frustrated Wood and his men must remain behind to scour the hillside as their deadline slowly runs out. But Ke Le is very close indeed, and as soon as Wood’s gone, he approaches an isolated soldier named Jacobs and introduces himself properly. “I am the Master, and you will obey me...”

After listening to Ling’s story, the Doctor realises that they’re in greater trouble than he’s imagined, but Lethbridge-Stewart still isn’t interested. Things are already complicated enough for him; the Chinese ambassador is threatening to send in troops before the handover, risking an international incident. The Doctor has some idea why; Ke Le must be one of the Doctor’s own people, and the “stealth device” which Wood was sent in to capture must be a crude adaptation of a TARDIS chameleon circuit. Lethbridge-Stewart questions the coincidence of such a renegade just happening to crash near a monastery containing what he terms “a pot full of evil,” and when the surprised Doctor questions him he realises that the renegade came here deliberately, looking for whatever the “soul jar” really contains.

Jacobs contacts Wood and claims that he’s found Red Canary, who is co-operating peacefully -- but only a few moments later, another soldier calls in claiming to have found Red Canary’s dead body on the hillside. Wood calls Jacobs to confirm whether he’s got the right man, but while Jacobs is describing his prisoner, his “prisoner” knocks him unconscious, steals his gun, and forces the Abbot to take him to the soul jar. The Abbot co-operates without resistance, as is the way of the order, but is amused by the Master’s desire for the soul jar. Once, while the Abbot was still a novice, he fell asleep while standing midnight vigil alone -- and yet nothing happened. The soul jar is only a symbol; it is the act of chanting that clears the mind and sets the monks on the path to enlightenment. Or so the Abbot believes...

Wood takes the unconscious Jacobs back to the dormitory, where Ling is horrified to learn that the soldiers found a man’s dead body outside -- and that the man who struck down Jacobs was wearing Adam’s clothing. As Ling sobs, the Doctor tries to warn Wood of the real threat, but Wood scoffs, drawing Lethbridge-Stewart’s ire. Old arguments break out anew, as the sceptical Wood has no intention of going the way of the Brigadier. Every time UNIT provided security at a peace conference, someone ended up dead; the papers made a mockery of the Brigadier recalled thousands of plastic flowers with no explanation; and as for his claim that the giant hole in the middle of London was caused because Mike Yates and his men went on a suicide mission into the past to prevent a race of reptile men from reviving in the present... As the two men lay into each other and the Doctor vainly tries to remind them of the soul jar, Ling is the first to hear the silence outside. The monks have stopped chanting.

The monks have fallen silent and yet the soul jar remains as dormant as ever -- at first. But when the Master has the Abbot remove its lid, he sees that the sludge inside is pulsing with life. Wood and his men burst in and take up firing positions, but when Ling storms forward in a rage, accusing the Master of murdering Adam, the thing in the soul jar takes possession of her mind. Even during their occasional lapses, the monks were too much at peace for the thing in the jar to affect them, but now the room is full of soldiers brimming with hate and fear, and the parasite has revived. The Doctor and the Master finally recognise each other, but the Doctor is unable to stop his old friend from shooting the Abbot in cold blood. When the soldiers try to seize him, the parasite gets into their minds as well, as well as the minds of the younger, angrier monks who haven’t yet achieved enlightenment and are angry with the man who shot their Abbot. Only the Doctor, Lethbridge-Stewart and Wood remain unaffected -- but they’re outnumbered.

The Master has his new slaves lock up the Doctor, Lethbridge-Stewart and Wood in a meditation cell. The Doctor has worked out that the creature feeds upon strong emotions in young humans, but before he can deduce any more, the Master invites him out to discuss their situation. The Master explains that several mind parasites survived a spaceship crash in China 150 years ago; Buddhist monks kept them neutralised with their chanting, with a few slip-ups such as the one which led to the Boxer Rebellion, but when Mao began to tear down the monasteries the parasites threatened to run amok. The Chinese government gratefully accepted the Master’s help when he defected from the West, and he used the mind parasites to create the notorious Ke Le divisions. However, he’s recently learned that the parasites have a finite capacity. The sated parasites are being held in check with electromagnetic fields, but the Chinese government wishes to wash their hands of the affair and intend to destroy the Ke Le machines -- in the “atomic tests” they’re conducting in Inner Mongolia. But when the parasites are destroyed, what will happen to the Ke Le divisions? The Master suspects that the zombie soldiers will get their memories back -- and they’ve been in charge of law enforcement all over China for decades...

As Wood tries to listen in on the Doctor’s conversation with the Master, Lethbridge-Stewart admits that he doesn’t know whether the Doctor can be trusted -- but if this man really is the Doctor he knows, he can’t quite bring himself to believe that he’d ever join forces with this “Master.” However, Lethbridge-Stewart’s opinion means little to Wood; in some ways, he and the former Brigadier are as unlike as are the Doctor and the Master.

The Doctor realises that the Master intended to seize the last parasite on Earth, thus becoming the only man on the planet capable of controlling the Ke Le divisions. He’s disgusted by the Master’s arrogance, but the Master is repulsed by the Doctor’s apparent failure to grasp the big picture. The Doctor knew Mao when he was a librarian; if he’d interfered then, he could have made a real difference to the world. Where was he during the Plastic Purges? Where was he when the Probe 7 fiasco ended with a string of radioactive craters across America? Where was he in My Lai, East Timor, or Rwanda? But as the Master rants, he lets slip that he’s been stuck on Earth throughout all of these disasters -- and when the Doctor seizes upon this, the Master is forced to admit that he’s lost access to his TARDIS. The Doctor in turn reveals that the Time Lords have placed an inhibitor on his TARDIS and wiped his memory of the knowledge he needs to fix it. He and the Master thus strike a deal; the Master will destroy the parasite in the soul jar, and in exchange the Doctor will allow him to help repair the TARDIS and they can escape from Earth together.

The Doctor explains the situation to Wood and Lethbridge-Stewart, who reluctantly agree to help. The Master frees Wood’s men, and the monks begin chanting again. Once the parasite has fallen dormant, they will take the soul jar to the TARDIS for disposal. As the UNIT helicopter has gone, taking the Master’s pilot and the stealth gear out to international waters, they’ll have to take the monastery’s tourist bus to the waterfront -- and as the waterfront will be thronging with tourists, they’ll have to proceed part of the way on foot. But it’s going to take some time for the parasite to fall dormant, leaving Wood and his men little time to get out of Hong Kong before midnight...

As soon as the parasite is safe to move, the bus leaves the monastery, leaving behind Ling and the recovering Abbot, who was wounded but not killed. On the way to the waterfront, the bus passes Marcus, who’s nursing a severe hangover. As the Doctor feared, the waterfront is too crowded for the bus to pass through, and they must proceed on foot. A sub just off the coast is preparing to send in two dinghies to collect Wood and his men, but they’ll have to move fast; in ten minutes, it will be midnight, and Hong Kong will officially be Chinese territory. As the fireworks begin, the Doctor, the Master and Lethbridge-Stewart pull ahead of the others and reach their destination -- and the Master holds Lethbridge-Stewart at gunpoint, demanding the keys to the Doctor’s TARDIS. As the Doctor suspected, the Master never had any intention of taking him along.

It seems that the Doctor has no choice but to point out his cleverly disguised TARDIS and hand over the keys. Scoffing, the Master pushes his way through the crowd, unlocks the “TARDIS” and enters -- but the Doctor suspected his intentions all along, and has in fact given him the keys to the Little England pub. Lethbridge-Stewart finally accepts that this is his old friend the Doctor after all, and accompanies him into the real TARDIS to dispose of the soul jar. The Time Lords’ inhibitor doesn’t stop the Doctor from travelling to Mongolia, where the Chinese are preparing to detonate an atomic bomb and destroy the remaining mind parasites. The Doctor and Lethbridge-Stewart place the soul jar in amongst the Ke Le machines and flee back to the TARDIS as the countdown to detonation approaches zero...

It’s 11:59, and as Wood and his men push their way through the crowd to the waterfront, they are followed by the desperate Master. He admits that, thinking he’d be long gone by now, he lied to the Doctor about the effect the parasites’ death would have on the Ke Le divisions. As he speaks, the British dinghies suddenly turn back, driven off by Chinese helicopters appearing as if from nowhere. The Chinese have sent in the Ke Le divisions to retrieve the Master, using his invisibility technology to hide their presence. But now it’s midnight, and there’s no need for stealth. Unfortunately, the bombs in Mongolia detonate, destroying the mind parasites -- and, just as the Master had feared, the Ke Le soldiers regain all of their memories at once. They’ve been used to maintain “order” in China for two decades, and the onslaught of memories drives them mad. The Ke Le divisions begin to fire randomly upon each other and into the terrified crowd of innocent bystanders, and the UNIT team begins firing back, even though they’re now officially invaders on Chinese territory. Wood and the Master find themselves caught in the middle of a disastrous international incident...