After nearly getting mugged, Hawke finds Archangel at a back alley bar. Acting as middleman, he mediates a trade: Hawke's $2,000 for current information and grainy photos of St. John in a Laotian prison camp. Hawke's Thai friend warns him about the danger of entering such an independently run communist camp where St. John is supposedly held.
At the cabin, Hawke proposes a plan to Dom to put together a specialized team to extract St. John. They go to a dirt bike race, where they recruit Kearns, one of Hawke's Vietnam buddies. Next, they go see Gary Wallace, California's senator select. He scoffs at Hawke's plan at first, then accepts, still scoffing. They meet in the woods, where Kearns and Wallace feel that Hawke is in over his head. But their faith is restored after they see Dom demonstrate Airwolf's capabilities.
They fly to Laos and survey the grounds. Hawke wants to take a closer look, against Dom's protests. They hover over the prison camp, taking gunfire, then leave with their new reconnaissance. They all meet in Bangkok, where they're keeping a stash of weapons in a warehouse. An old friend of Hawke's, Charmaine Beaucaire, a.k.a. Chin Mao, becomes their guide and helps them get around.
They go get the weapons at the warehouse, when customs officers arrive. They narrowly escape with their weapons. The next morning, they trek through the Laos jungle to the prison camp, with Dom covering them in Airwolf. Soon into their journey, they're captured by guerilla soldiers and taken to their leader. Hawke distracts him with money, and at knifepoint, uses him to steal their jeep and escape.
The next day, they arrive at the prison camp, and as they move in, something seems to bother Wallace. Once inside the camp, Wallace's head clearly isn't in the game, as they make it inside a hut holding Asian prisoners. While Hawke frees them, Wallace has acute paranoia about the Viet-Cong. Then he has a breakdown, admitting that he gave in to his torturing and leaked information to the Viet-Cong about their escape attempt back in their 'Nam days, resulting in his release, but leaving Kearns to spend another year there. Outraged, Kearns aims his rifle at him, but actually shoots a guard entering the hut. The shots draw the attention of the other guards in the camp and they exchange gunfire.
The group stays pinned down, while other guards move prisoners out of the camp. To Kearns's relief, Airwolf arrives and Dom lays down some cover while they move their rescued prisoners to a truck. Hawke takes off in Airwolf, while they leave with the truckload of prisoners. Hawke tries to catch up to the other truck, thinking that St. John is in it.
Kearns's truck takes a roadside machine gun attack. They become pinned down, until the guilt-ridden Wallace sacrifices himself by charging the foxhole with a grenade and diving in, killing himself and the shooters. Hawke finds the truck and blows the road in front of it to stop it, scaring away the guards. When Hawke goes inside, he's disappointed that St. John isn't there. An American prisoner tells him that another group of prisoners were relocated before his arrival, shattering Hawke's effort. Kearns and Mao arrive, and they transfer the American prisoners to their truck as they come under attack by jet fighters.
They drive to cover, while Hawke pursues the fighters. He quickly destroys all three, while Kearns and Mao watch below. Afterward, Hawke makes a tearful promise over Airwolf's P.A. system that he'll return for him.
Back in the States, a funeral service, including a 21-gun salute, is held for Wallace. Kearns offers to have a beer, to which Hawke rejects. But after a moment, Hawke changes his mind, bringing a somewhat happy moment to a sad occasion.