The colony on Heletia was founded by actors who wished to stage the greatest dramas of the Universe. Its people are now expanding through the Rippearean Cluster, conquering world after world. But the colonists’ love for the theatre remains, and when archaeologist Camarina Lannic finds evidence in the nearby Braxiatel Collection that the dead world Menaxus was once home to a civilisation just as devoted to the stage as are the Heletians, the Exec himself grants funding for an expedition to the ruins of the Pentillanian Theatre. Within days, however, one of the soldiers escorting the expedition is found shot, clutching a weapon which the escort hadn’t brought with them. Lannic is forced to return to the orbiting mothership to report the incident, but when she tries to call back to the surface, the communications unit picks up what appears to be the sound of an enemy ground strike. Only seven life forms can be detected on the planet’s surface out of an original twenty-six, and, assuming that the expedition is under attack from the Rippeareans, the Heletians bombard the theatre with lethal radiation. The site remains undamaged, but nobody will be able to set foot in the ruins for another five years.

Five years later, the course of the war has changed, and the Heletians are steadily being driven back to their homeworld. Nevertheless, a second expedition is scheduled to return to Menaxus, and the historian Panactum Gilmanuk is sent to the Braxiatel Collection to inform the staff of their plans. While there, he meets Benny Summerfield, who is bringing the results of Professor Rhukk’s Phaester Osiris expedition to the Collection. When she learns about the expedition to Menaxus she becomes intrigued, and convinces Gilmanuk to invite her along. Shortly after they touch down, however, the Heletians hear that the Rippeareans have achieved a strategically significant victory, and will reach Menaxus much sooner than expected; they now have less than eight days to complete their work.

Menaxus is now in its wet season, and the ruins are covered in mud; fortunately, the previous expedition covered the ampitheatre with a large tarpaulin, and the soldiers are able to cut their way through to it with water cannons. As they do so, they find a relic which the previous expedition had overlooked -- an archway which seems to carry a curse on the ruined building. Upon breaking into the theatre itself, the soldiers begin to see ghosts, including the spectre of a man in armour who walks straight through the skene. Benny finds a hidden doorway in the area where the “ghost” disappeared, and when she investigates she finds a room containing a machine with a projection nozzle pointing through a one-way mirror onto the stage. She is then attacked by the all-too-solid ghost, which vanishes when she tries to use the machine to beat him off. Realising that she’s out of her depth, she activates her distress beacon to call in the Doctor and Ace, and returns to the stage -- to learn that one of the soldiers, Cambri, has just been found decapitated in the mud corridor.

The Doctor and Ace home in on Benny’s signal and materialise in what appears to be a medieval castle; however, they can’t see beyond its borders, and the people within appear to be frozen in Time. As they explore further, they find a woman frozen in conversation with an elderly man, and must hide behind a curtain when the man and woman suddenly spring to life and resume their conversation. Ace finds the dialogue strangely familiar, and finally realises why when the old man hides behind the arras himself -- moments before Prince Hamlet of Denmark enters the room to confront his mother, Gertrude.

While Tashman and Bannahilk investigate Cambri’s murder, the engineer Fortalexa studies the machine which Benny found, and concludes that it’s a holographic projector. He accesses the list of plays stored within the machine, and is astonished and delighted to find that it includes The Good Soldiers, a legendary lost play by Stanoff Osterling which has not been performed for centuries. He determines that the “dream machine” is operating in stand-by mode, and switches it off -- causing the Doctor and Ace to appear on-stage moments before Hamlet nearly stabs Polonius, and them, through the arras. Benny convinces the others that the Doctor and Ace are friends of hers, and the Doctor offers to help investigate the murder. When Benny fills him in on events, he becomes even more curious; particularly when he notices that Ace is bleeding where the supposedly holographic Hamlet nearly stabbed her. There are other things about the theatre itself which just don’t make sense, and the Doctor thus transports Benny back to the Braxiatel Collection in the TARDIS, telling her to use his research ticket to find out all she can about the Pentillanian Theatre.

The shuttle pilot is found smothered to death in the mud, and the others decide to leave, taking the dream machine with them. While digging a passageway for the machine, however, Tashman uncovers stone statues of the Doctor, Ace, and Lannic buried beneath the mud -- and the statues come to life and kill him and Bannahilk. Gilmanuk sacrifices himself to give the others time to escape, but when Ace tries to launch the shuttle she finds that it’s mired in the mud. The Doctor theorises that the planet’s mud is an intelligent organism which has formed itself into statues in order to attack the invaders. He programmes the dream machine to replay the duel at the end of Hamlet, and while the statues are distracted by the holograms, he, Lannic and Fortalexa clear the mud out of the ship’s vents. Lannic risks her life to get the dream machine back aboard the shuttle, refusing to leave Menaxus without something of value to take back to the Exec. As the survivors return to their mothership, however, the Doctor privately admits to Ace that his theory about the mud is far-fetched at best. The concept of people being attacked by their own statues seemed familiar to him, but in a different context. In any case, he’s more concerned about the theatre itself, which simply doesn’t make sense; why would anybody build an open-air theatre on a planet where it rains for half the year?

Benny tries to use the resources of the Braxiatel Collection to reconstruct the Pentillanian Theatre as it would have apperaed in its prime, but finds that she is unable to do so. The theatre acoustics are perfect as long as it’s empty, but when it’s filled with a simulated audience the actors can barely be heard. The position of the rubble indicates that at least one of the walls was deliberately knocked down, and many of the other ruins cannot be assembled into coherent structures. It’s as if the theatre was designed as a ruin, and as Benny investigates further she finds that every document pertaining to the planet Menaxus is related to this one theatre -- and that many of the source documents, supposedly spanning centuries, appear to have been written by the same person. At this point Irving Braxiatel himself interrupts her research, admitting that she has been under observation ever since she entered with the Doctor’s research ticket. Before he explains the truth to her, he shows her an item from his own private collection -- the only surviving copy of The Good Soldiers, which he has hidden to preserve its mystique (since it’s actually not a very good play). He then gives her a message to take to the Doctor -- and confirms what she had already started to suspect about Menaxus.

The survivors of the expedition are spotted by a Rippearean cruiser and pursued through the Schlaer asteroid belt, but Ace risks her life by spacewalking out onto an asteroid to shoot out the attacker’s drive systems from an unexpected direction. Her suit is holed by a fragment from the ship’s exploding drive, but Fortalexa risks his own life to save her. Afterwards, however, while experimenting with the dream machine’s real world interface, Fortalexa becomes colder and more distant, and when the ship returns to Heletia itself he shuts himself up in the Exec’s private theatre to get the dream machine working properly. Lannic also seems to undergo a complete change of personality, gushing over the Exec and attempting to seduce him; the planet’s war marshal, Manact Marlock, decides to let her continue, as this will keep the Exec occupied and allow Marlock to get on with running the planet. The Doctor and Ace aren’t impressed with the Exec, a spoiled young man who nearly sentences two hundred innocent citizens of the planet Arbela to death in a fit of pique before the Doctor tricks him into reversing his order.

The Doctor and Ace remain suspicious of Fortalexa’s changed behaviour, and break into the theatre to examine the dream machine more closely. The Doctor realises that it contains not just holographic projections, but entire miniaturised universes. He manages to transmit himself into the machine’s database, where he finds living scenes from plays such as Hamlet, The Real Inspector Hound, The Croquet Match and Death’s Bane -- the latter being a superficial spectacle in which killer statues come to life. As he explores further, he finds another living man within the plays, and pursues him to the set of The Good Soldiers -- where the man identifies himself as a recreation of Aronholt, the inventor of the machine. The deaths on Menaxus prove that things and events can emerge from the pocket dimensions within the machine and affect the real Universe, and the Doctor now believes that The Good Soldiers is the bait for an elaborate trap which destroyed the civilisation on the planet Menaxus -- and which is now about to do the same thing on Heletia. Aronholt confirms certain of the Doctor’s suspicions, but informs him that he has some vital facts wrong. Nevertheless, the Doctor is able to convince Aronholt to let him rewrite The Good Soldiers without changing the desired result of its performance.

The Arbelan commissioner, grateful for the Doctor’s earlier intervention, contacts Ace and asks her to help his people. At first she is unwilling to get involved, but the commissioner advises her to find out what the war is really all about before she makes her decision. While trying to decide what to do, she returns to the Exec’s theatre to speak with Fortalexa, only to find him being guarded by two robots which attempt to kill her. She manages to dispose of one and flees, and as she has nowhere else to run to she decides to take the commissioner’s advice and break into Marlock’s offices. There, she finds evidence that the Heletians are responsible for horrific atrocities on the worlds which they have conquered. Before she can do anything about her discovery, however, Marlock captures her and throws her into the palace dungeons.

Benny slips past the Heletian defenses in a delta dart lent to her by Braxiatel, and reaches the Exec’s palace, where she frees Ace from the dungeons. When the Doctor returns, Benny tells him and Ace that there was never any civilisation on Menaxus; the entire expedition was engineered by Braxiatel. Five years ago the Heletian advance threatened the Collection itself, and Braxiatel therefore planted the dream machine on Menaxus as a trap. It was programmed to create havoc in order to force the expedition to leave Menaxus before they realised that the ruins they were studying were fakes -- but it did its job too well, and the Heletians were driven away before they even found the machine. Now that the course of the war has changed the original plan is unnecessary -- but it will unfold nevertheless, and when The Good Soldiers is staged before the Heletian court, there will be a mass slaughter. Nevertheless, the Doctor intends that the performance should take place as planned…

Ace, furious, attempts to stop Fortalexa from activating the dream machine, but fails -- and when he switches on, he vanishes in a blur of red light which is drawn back into the machine. The real Fortalexa was killed on the way back from Menaxus and replaced by a stage character generated from within the machine. Ace is recaptured before she can destroy the machine, and Marlock has her tied up in the theatre so she can watch the performance before her death. Benny slips out before the play begins, telling Ace that due to budgetary restraints following the Dalek invasion and Cyber wars, the dramas of Osterling’s time were all talk and no action. But just as Ace is about to relax, the Doctor informs her that this is why The Good Soldiers has such an enduring reputation even though it’s not a very good play -- Osterling broke with tradition by allowing an army of robot soldiers to storm the castle at the end, actually killing most of the characters on stage…

When the play reaches its climax, the robots kill the main characters -- and then march off the stage to attack the audience. Just as the slaughter is about to begin, however, the lead character removes the hooded cloak he has worn throughout the play to reveal that he’s being “performed” by the Doctor. The holographic Doctor recites an improvised speech about Time and decay, and the killer robots rust away to nothing within seconds. The Heletians have been distracted without the need for mass slaughter, and in the confusion, Benny has installed a computer virus in their defense grid, shutting it down and allowing the Rippeareans to land on the planet unopposed. The Exec flees from the theatre in panic, accompanied by Lannic -- but once they’re alone, she reveals that her husband was killed by Heletian soldiers years ago, and that she’s only been trying to get to the Exec in order to kill him. She shoots both the Exec and Marlock -- and then vanishes, revealed to be yet another stage character from the dream machine. As the Rippeareans take control of Heletia, putting an end to its brutal regime, the Doctor departs with Ace and Benny, unwilling to admit that in the end, Braxiatel -- whom he knows very well indeed -- managed to out-manipulate even him.