As the Doctor prepares to search for Sam, he receives a psychic cry of pain and despair from his grand-daughter Susan, and discovers that it was focussed through another TARDIS on a distant planet. He decides to materialize on Earth following the Dalek invasion, as thatís the same time period in which Sam disappeared; perhaps he can find her as well while preventing whatever caused Susan to send the cry.
Following the invasion, Earth is devastatingly underpopulated, and the survivors (in Britain, at least) have coalesced into city-states which are currently engaged in political infighting. Lord Haldoran supplies most of England with power, but Lord London opposes him and many city-states are flocking to London for power supplies. War seems inevitable, but Haldoran has a secret weapon; his mysterious military advisor, Estro, is supplying him with Dalek guns. Meanwhile, Susan and her husband David are having marital difficulties, as itís become increasingly difficult as the decades pass to hide the fact that Susan isnít aging while David is. Susan is a Peace Officer, one of the elite who keep the Earth safe from the Dalek Artefacts left behind after the invaders were defeated; when she receives word that someone is tampering with the buried DA-17, she sets off to investigate, but is captured by Estroís men...
The Doctor materializes on Earth and meets Donna, a knight of Domain London (in fact, Lord Londonís daughter). He accompanies her back to London, where he learns of the political situation and is disappointed to find that the people of Earth are fighting amongst themselves rather than working together to rebuild the planet. Haldoran launches an attack on London, sending his best man, Tomlin; in fact, this is simply a lure to draw Londonís troops out into the open, while Haldoranís officers Barlow and Craddock strike with their Dalek weapons. Tomlin realizes too late that heís been betrayed, and escapes the battle, vowing revenge.
The Doctor and Donna meet David and learn of Susanís disappearance, and they set off for DA-17 to investigate themselves. They too are captured, and sent to Haldoranís castle for questioning; Donna is terrified, as she was once married to Haldoran for political reasons and knows the man to be cruel and sadistic. The Doctor is more concerned with the fact that people are tampering with a Dalek Artefact, as the Daleks always leave behind traps for the unwary. At Haldoranís castle, they meet Estro, whom the Doctor instantly recognizes as the Master -- but itís the Master in a former incarnation, the one the Third Doctor fought most often, and the Doctor realizes that by backtracking Susanís call heís broken a law of Time and encountered the Master ďout of orderĒ. The Master reveals that heís set Haldoran and London against each other to amuse himself while he waits for DA-17 to be opened; Haldoran believes that the Master is getting his Dalek weapons from DA-17, but in fact heís supplying Haldoran from a private cache of his own and intends to open DA-17 because heís learned thereís a powerful secret weapon inside which he intends to seize.
Susan manages to escape from her guards and break into the mine workings around DA-17, but is too late to stop the technicians from completing their work. By supplying DA-17 with power the Master was hoping to decode the security locks keeping the Artefact sealed, but in fact heís supplied it with enough power to begin manufacturing new Daleks from its store of raw minerals and Dalek embryos. The Daleks emerge, capture Susan and transform the Masterís guards and technicians into Robomen. Susan is left alive for questioning, but manages to escape from her Roboman guards and get to the heart of the Dalek Artefact. There, the Master materializes in his TARDIS and reveals that the Daleks have created a matter transmuter capable of transforming any element into any other element; he intends to use it as a weapon, holding civilisations hostage to his demands for power.
The Doctor, David and Donna overpower their guards and try to get past Haldoran to destroy his cache of Dalek weapons, but Haldoran sees through them and recaptures them. At that moment Tomlin arrives and tries to kill him, and although Haldoran kills Tomlin, Donna takes advantage of the distraction and shoots Haldoran as well. Barlow returns, having successfully conquered London with his Dalek guns; Lord Londonís men killed him when he refused to surrender. The Doctor, learning that all communication has been lost with the Masterís men at DA-17, manages to convince Barlow that something has gone wrong there, and Barlow leads a squad to the pit and learns whatís happened. The Daleks are currently confined to the pit area, but are building a power transmitter which will enable them to venture further into the surrounding countryside.
Barlow and his men fight the Daleks and Robomen, while the Doctor, David and Donna break into DA-17 to find out whatís really going on. Since the Daleks are no longer receiving power from Haldoranís stores, the Doctor increases the embryo production in the hatchery, draining power from the Artefactís reserves; and while the Daleks are busy dealing with this, he also sets the factory production reactors to overload. Meanwhile, the Master seizes the core of the matter transmuter and tries to escape; the Doctor, Donna and David run into him, and when the Master tries to shoot the Doctor, David pushes the Doctor aside and is killed himself.
The Master retreats back to his TARDIS and leaves with Susan as his hostage, and the Doctor and Donna escape from DA-17 moments before its reactors overload and explode, wiping out the Daleks. The Doctor slowly recovers from his injuries, and Donna and Barlow decide to marry; partly for political convenience, but not entirely. Once the Doctor has fully recovered he returns to the TARDIS and tracks the flight of the Masterís, but when he discovers that it materialized briefly on Tersurus and then left again, he recalls the name of the planet and realizes what happened. The Master, not realizing that his hostage was also Gallifreyan, was caught off guard when Susan amplified a shriek of pain and despair through his own TARDISí telepathic circuits, incapacitating him; he tried to flee out onto the surface of Tersurus, but was caught in the explosion and nearly killed when Susan turned his own TCE on the matter transmuter. Susan then left Tersurus in the Masterís TARDIS, and the crippled Master remained to be discovered by a certain Chancellor Goth of Gallifrey who was investigating the renegade TARDIS materialization. The Doctor decides to leave Susan her freedom, and sets off once again in search of Sam.