In London during the Blitz, Prime Minister Winston Churchill arrives at a secret command center. They tell him that the Germans have recommenced bombing and Churchill orders them to use their new secret weapon. They turn to a tactical map and place a Dalek model.
The Doctor and Amy arrive in the command center in response to Churchill's phone call and find the Prime Minister and British soldiers waiting for them. The Doctor introduces Amy as his newest companion and Churchill half-jokingly asks him for the TARDIS key. The Doctor just as half-jokingly defies him and they go to Churchill's office. He explains that the Doctor is a month late from when he called him. Lillian, one of the officers, is upset but quickly covers it when Churchill assures her that things will be fine. The Prime Minister then tells the Doctor that the Nazis are preparing to invade, and he has to do anything necessary to stop them. They go to the roof and Churchill introduces them to Professor Edwin Bracewell, who has created the Ironside Project. German fighters soar over London and Bracewell orders his newest project to open fire from behind a barricade. An energy weapon shoots upward, destroying the fighters, and the Doctor realizes he's dealing with an anomalous time element. Bracewell commands the weapon to emerge and the Doctor is horrified to discover that it's a Dalek. He confronts his oldest enemy, which claims to have no idea who he is. Bracewell explains that he created the Dalek to aid the British in winning the war, and the Dalek agrees.
Churchill goes below and shows the Doctor' Bracewell's blueprints for the Dalek. The Doctor insists that the Daleks are alien creatures and Bracewell couldn't have invented them. Daleks are working in the command center, serving tea. Churchill insists that the Ironsides will win the war and explains that he initially had some doubts, which is why he called the Doctor a month ago. Since then, the British situation has become increasingly desperate and he no longer wants the Doctor's advice. The Doctor turns to Amy and asks her to describe to Churchill how the Daleks will invade Earth in the late 20th century, but is surprised to discover that she doesn't remember any such invasion.
The Doctor continues to watch the Daleks, wondering what they're up to. Amy asks one of the Daleks if it's an alien, but it insists it's a British soldier. The Doctor turns to Churchill, but the Prime Minister insists that he'll use whatever and whoever he can to win the war. The Doctor goes to see Bracewell and asks him where he got his idea for the Ironsides. Bracewell claims that idea and others just came to him. The Doctor refuses to accept the Daleks' presence and attacks one of them, attempting to provoke it into killing him so Churchill can see how dangerous they are. It refuses to defend itself, even when the Doctor stridently insists that he's the Doctor. However, after the Doctor has identified it as a Dalek several times, the Dalek suddenly says that it has recorded his "testimony." The Daleks send a record of the Doctor's words to their hidden satellite behind the moon, and the two Daleks there broadcast it to the "Progenitor."
Now that the Daleks have revealed their true nature, Churchill calls in his soldiers, but the Daleks quickly cut them down. Bracewell orders them to obey him, insisting that they're his creations. One of the Daleks blasts off his arm, revealing that Bracewell is a robot. They explain that they created him. They teleport away and the Doctor realizes that their entire plan was to provoke him into identifying him. He runs for the TARDIS to trace their signal and go after them, telling Amy to stay behind. As he goes, Lillian and her team locate the Dalek saucer and they realize the Doctor has gone there.
The two Daleks aboard the saucer watch as the Progenitor activates. They feed all reserve power to it as the Doctor arrives and steps out of the TARDIS. He pulls out a device and claims it's the TARDIS self-destruct, and promises to activate it if they attack him. He realizes that the ship is all but destroyed and that the Daleks are dying. The Daleks inform him that after they escaped the Doctor previously, they located a Progenitor device in the past. It contains untainted Dalek DNA, and the Doctor realizes that they set the entire scheme in motion because the Progenitor didn't recognize them as true Daleks due to their tainted DNA. The tainted Daleks needed the Doctor to confirm their identity so the Progenitor would activate for them. Now that the humans serve no further purpose, the Daleks inform the Doctor that they will trick the humans into destroying each other since the Daleks lack the power.
An energy beam from the Dalek saucer strikes London, powering on all the lights and ending the blackout against the German bombers. As the bombers close in, Amy suggests they attack the Daleks using something from Bracewell's other "future" blueprints.
The Doctor demands that the Daleks stop the power transmission, but they refuse and tell him to leave. The Progenitor completes its work and a new Dalek paradigm emerge: five untainted "pure" Daleks: white, blue, yellow, orange, and red.
In the lab, Bracewell is holding a gun and considering suicide when Churchill and Amy arrive. He remembers everything that happened to him in his human life and has no idea what he is. Amy manages to get the gun away from him and tells him that he's the only one who can help them against the Daleks. Churchill and Bracewell get an idea and figure out a way to destroy the Dalek saucer.
The new Dalek paradigm declare the tainted Daleks as inferior and destroy them. They then advance on the Doctor, unconcerned about his self-destruct threat. Bracewell manages to intercept their transmissions, and he and the others watch as the Daleks scan the "self-destruct device" and realize it's a Jammie Dodger. Before they can destroy the Doctor, they detect approaching spacecraft. They check the monitors and spot three British fighters... modified to fly in space, and flown by RAF pilots. The Doctor contacts them and tells them to fire, and then runs away as the Daleks fire on him.
The Daleks return fire on the fighters, destroying two of them. The third pilot is unable to get through and contacts the Doctor, who has reached the TARDIS. The Doctor disrupts the saucer's energy shields and the pilot destroys the energy pulse device. The blackout is restored and the Doctor tells the pilot to finish off the saucer. However, the Daleks contact the Doctor and tell him to call off the attack, or they will destroy Earth. The Doctor believes they're bluffing, but the Daleks inform him that Bracewell contains a massive bomb. When the Doctor refuses to give in, they start the countdown and the Doctor reluctantly tells the pilot to back off. The Daleks refuses to honor their end of the agreement and continue the countdown, and the Doctor takes the TARDIS back to the command center.
Once he's back, the Doctor tells Bracewell and the others about the bomb. He opens up the professor's chest and tries to disarm bomb, and explains that Bracewell's memories were stolen and implanted. Unable to stop the bomb, the Doctor tries to convince Bracewell to call upon and reinforce his human memories and stop the bomb from triggering using his indomitable human spirit. Bracewell is unable to do it until Amy talks to him about the pain of losing a loved one. Bracewell remembers an old girlfriend, Dora Bella, and the countdown device in his chest finally stops, seconds from detonation.
Once they realize the bomb has stopped, the Daleks open a time corridor and escape. Bracewell tells the Doctor that his creators have left, and the Doctor despairs, insisting that he has put the universe at risk by saving Earth rather than destroying the Daleks. Amy and Churchill convince him that it's for the best and he finally cheers up.
The next day, the British are restoring order after the attack. Lillian breaks into tears upon learning that her boyfriend, a RAF pilot, was shot down over the English Channel. The Doctor disposes of all of Bracewell's blueprints to prevent an alteration in history, but assures Churchill that the United Kingdom will eventually triumph over the Nazis. As they go, Churchill hugs the Doctor, and Amy catches him trying to steal the TARDIS key. The Prime Minister unapologetically returns it and concedes that the Doctor has won their little game... this time.
The Doctor and Amy go to see Bracewell, who expects them to shut him down now that he's a security risk. They tell him that they'll get to it the next time they return, and hint that it might be a while until they return. Bracewell finally realizes what they mean and thanks them for his second chance, and plans to go and find Dora Bella.
As they enter the TARDIS, Amy wonders about the Doctor's archenemies. However, she still plans to travel with him. Amy assures him that the new Daleks will take time to marshal their forces, and the Doctor worries that she doesn't remember their 21st century invasion. As the TARDIS dematerializes, the time travelers are unaware that there is a time crack in the wall behind them.