Christmas Eve, 1977 : in a London council flat known as the Quadrant, young Bev Tyler hides and watches as her mother leaves their flat for a terrible confrontation with a strange man. The Doctor stands nearby, watching as Bev sees something that will haunt her for years to come. Ten years later, a week after the young drug dealer known as the Capper burnt himself to death in the Quadrant's courtyard, his body digs itself out of its grave in Smithfield Cemetary, kills a mugger and stitches the dead man's flesh onto its frame. The Capper then returns to its flat in the Quadrant, and his arrival is observed by 9-year-old Gabriel Tyler -- a boy with a knack for knowing what other people are thinking.

The Doctor breaks off a holiday in New York when he's reminded of a loose end he's left hanging. For some time now, he's been tracking an unusual consignment of cocaine; the path of the shipment is littered with bodies which have burst open from the inside. The trail leads to the Quadrant, where Bev Tyler recognizes the Doctor but is uncertain why the sight of him fills her with such dread. She takes him and his companions to the Quadrant, where they find that they're expected and a flat has already been rented in their names. Obviously the Doctor will do this at some point in the future, but it all seems too obvious -- as if he was terribly rushed when he made the arrangements...

The Capper contacts his old drug associates, trying to sell off the cocaine which has recently come into his possession at bargain prices; he claims his intention is to spread it across the country rapidly and thus create thousands of new customers. However, his old associates are terrified by the sight of him and firebomb his flat. He uses his new powers to teleport out of the inferno and contacts the Leathers, who run a local drugs and prostitution ring; they're too dull-witted to realize how odd this new Capper is, and agree to sell the cocaine for him. The Capper retreats back into the dimensional rift wherein lies the machine which has taken control of his body and mind. Lacking a central intelligence core and unsure why, it has latched onto the Capper's mind to fulfill its lost functions -- and as the Capper now wishes revenge on his former associates, the machine prepares to exact that revenge for him.

The Doctor infiltrates the lives of the Quadrant residents in the wake of the firebombing, and learns some of their secrets. Gabriel Tyler possesses a mild psychic Glamour, but the Doctor feels it's not strong enough to be significant. David Daniels tries to pick up the gorgeous Chris, who isn't certain what he's talking about. Later, the Doctor, Chris and Roz examine the Capper's flat, and find evidence that the threat here is more dangerous than even the Doctor had expected. He builds a device which will seal the cracks caused by the Capper's passage through space, and orders Chris to fetch him some contaminated cocaine.

But the Doctor isn't aware of another player in the game -- Eva Jericho, an upper-class wife and mother who has brought her dying child Steven to the Frei Institute for care. As a young girl, Eva was dared by her classmate Sally Hunt to shoplift a sweater, and was arrested and charged for the crime; years later, when her application for adoption was turned down after several miscarriages, she became convinced that it was due to this long-ago criminal record. She and Alfred found another way to have a child, but all the doctors in the world have been unable to do a thing for Steven, whose health has deteriorated since birth. Over the years Eva's distrust of doctors has grown steadily -- as has her madness, and the Voice inside her head which hums accompaniment to her darkest desires...

Gabriel feels a lure calling him out to the world beyond the Quadrant, and manages to slip away into the city -- to the Frei Institute, where Eva sees him and pursues him, her brittle sanity snapping under the conviction that this is her boy Steven returned to health. Gabriel panics and flees back to the Quadrant, where he uses his Glamour to convince everyone that he isn't there. Eva phones her husband Alfred in a panic, but hangs up on him when everything suddenly becomes clear to her. Alfred, fearing the worst, sends his servant Thomas to the Quadrant to find out if Winnie Tyler is still there. The Doctor hears Bev Tyler screaming as she enters the flat to see her mother confronting the Tall Man again. Roz captures Thomas, and the Doctor, realizing the truth, forces Thomas to take him and Roz to the Frei Institute. There, they see the dying Steven Jericho, whom the Doctor identifies as Gabriel Tyler's twin.

Nearly ten years ago Winnie found herself pregnant with twins, abandoned by her husband and unable to support even the two children she currently had. She was contacted by Thomas on behalf of the Jerichos and eventually agreed to sell one of the twins to him; but she was so ashamed of herself that she never used any of the money and remained in the Quadrant, trying to sacrifice her own happiness to raise her remaining children properly. But what nobody knew was that Gabriel and his twin were a psychic gestalt, and that their separation had warped the bond. For nine years Gabriel has prospered by draining away his twin's life, and it's now far too late to save Steven's life. Dr James Greco, who had invited Eva to the Institute with the promise of saving Steven, is in fact a member of the psychic Brotherhood which the Doctor and his companions last encountered in 19th-century France; he had discovered the relationship between the two boys and wanted to see what would happen if they met. But the draining of Steven's life has attracted the attention of something terrible, and their proximity has accelerated events...

Chris convinces David to show him around the city, hoping to score some cocaine; David agrees, just hoping to score. But the city's major players have been invited to a party by the Capper, and they're too terrified to do business. Chris stakes out the party site, and while waiting for the dealers to make a move, David makes a move of his own. Chris decides to satisfy his curiosity, and, unaware of the need for urgency, turns off his cell phone. By the time Roz and the Doctor get in touch with him, it's too late -- the Capper bursts from the dimensional rift and slaughters his former associates, bringing down a passing commuter train in the explosion. Chris pursues the Doctor with the Doctor's device; unable to retreat back into the rift, the thing which was the Capper retreats into the sewers instead as chaos spreads in the wake of the disaster.

The Doctor follows Chris into the sewers to find that the Capper is rapidly becoming subsumed into the machine. The Doctor quotes Time Lord digital codes to delay its activation; the machine is an N-form, created by the Patrexes chapter for the war with the Vampires. After the War ended its central intelligence core was downloaded, but somehow this one has been reactivated. Seeking a purpose, it has concluded that the draining of Steven's life by Gabriel indicates a Vampire inheritance in humanity, which means it must destroy the planet. It has attached itself to the cocaine on a molecular level, opening tiny dimensional rifts inside the scarred brains of everyone who has taken the drug; once there are enough miniature rifts across the country the N-form will emerge from thousands of points rather than from one large, potentially continuum-destroying rift. The Doctor can only shut it down by interfacing through an engram of his own, which means he needs the cocaine to open one within his brain. Chris returns to the disaster site to fetch some while the Doctor tries to reason with the N-form, to no avail.

Eva murders Alfred and Thomas for refusing to tell her that Steven had a twin, and then fetches Steven from the Frei Institute, surprising Roz and knocking her out. She then takes Steven back to the Quadrant and confronts Winnie Tyler, demanding to exchange her own "damaged goods" for a proper, healthy son. Gabriel emerges from hiding, sensing his twin's proximity, but this accelerates Steven's collapse and he crumbles to dust. Steven's death results in the full activation of the N-form's final imperative, and it discards the Capper, marches to the Quadrant and absorbs Gabriel and Eva into itself. At the last moment it recognizes its mistake, but it's far too late -- its dependence on the Capper has left it open to Eva's madness, which overwhelms it. Believing that she has achieved paradise, Eva welcomes everybody in...

All eleven thousand people who have taken the contaminated cocaine die as N-form extrustions explode out of their brains and begin killing everyone in their vicinity. Eva slaughters the inhabitants of the Quadrant, either welcoming them to her golden realm or just going shopping. Chris manages to get some cocaine to the Doctor through the chaos, but it's too late to break Eva's hold on the N-form and the Doctor must confront her personally. He is unable to reason with her, but discovers the truth behind her Voice -- and has no choice but to accelerate its growth. The Voice turns out to be a lithopaedian child, an extrauterine pregnancy which calcified within her body following one of her miscarriages and which was brought to half- life by the psychic energy radiating from Steven's body over nine years of illness. The stone child tears itself free of Eva's body, killing her, and the Doctor is finally able to shut down the N-form.

Among the thousands of casualties are the entire Tyler family. The Doctor traces the source of the signal which accidentally reactivated the N-form, and sets off to investigate -- having found that the signal originated from Roz and Chris' home time period. In the aftermath, it is eventually found that David Daniels has picked up an of immunity to HIV from somewhere... or someone. UNIT's file on the incident is stolen by someone working for Dr James Greco, but investigation after the fact has shown that Eva Jericho's miscarriages and lithopaedian birth were due to uterine trauma which she may have suffered in a fight as a schoolgirl. And her former classmate, Sally Hunt, suffered a stroke as a schoolgirl and has been an invalid ever since -- following an attack by an unidentified assailant.