Inside a Nazi concentration camp, a line of newly arriving prisoners walks past an assemblage of long-time internees who are headed for what appears to be a gas chamber. A haughty and apparently wealthy new prisoner comments on the indignity of being exposed to these wretches. One of those heading to the chamber warns that soon she will be one of them.
Inside the chamber, the horrified prisoners begin to burn physically as their psychic essences are completely absorbed.
Rachel Summers wakes from this dream with a scream, the Phoenix effect filling the sky around Excalibur’s lighthouse with a spectacular display to accompany her defiant cry. The other members of the team make their way to Rachel’s side to see what is wrong. As Rachel calms herself and tries to reassure her teammates that she is fine, she looks at Kitty Pryde only to see a vision of the alternate Kitty Pryde of Lightning Force, the version of Excalibur in an alternate timeline dominated by Nazi Germany.
Rachel’s vision fades just as there is a knock at the front door. The team is surprised to see an irate Alistaire Stuart at the door. He angrily asks where they were and explains that the Leader has demanded that all mutants register and that today was the day Excalibur had promised to comply. He is angry because he personally vouched for the team’s credibility. The team believes that he is simply joking until Alistaire raises his arm in a Nazi salute and exclaims “Heil Hitler” before abruptly leaving.
Realizing that something is amiss, Nightcrawler wonders if perhaps they did not truly return to their proper time and place following the Cross-Time Caper. Rachel assures him that this is indeed their reality but that something is terribly wrong.
Elsewhere, a small group of Nazi officers report on the latest psychic executions. Their commander, Herr Xavier orders them to continue in the psychic executions of mutants until they get the results he needs. His goal: elevating mankind to the next stage of evolutionary development thus creating…The X-Man!
Once his troops leave, Herr Xavier revels in his power and muses about the inferiority of the Leader who has groomed Xavier himself as his successor. As he plots his ascension to power, he is struck by some form of psychic attack. He crumples in pain but recovers quickly. It is clear that this is not the first such experience of mental pain that has struck Herr Xavier, who describes it as a feeling that his mind is being invaded by something or someone.
Excalibur make their way to London to investigate the obvious reality shift that has altered their world. As they make their way through the city, they are assailed by anti-mutant slurs from the gathered crowds.
They find the Prime Minister surrounded by Nazis. Each member of the team is tense and on edge but realize that they must not act rashly if they are to get to the bottom of this new mystery.
Elsewhere, the Leader has turned to his closest ally, Johann Schmidt AKA The Red Skull, for help against the growing threat that the power-mad Xavier poses. The Leader laments that he had seen Xavier as the future of the Reich but that Xavier’s grand schemes have destroyed his own dreams for the Reich. The Red Skull renews his vow of loyalty to The Leader who is revealed to be a frail and wheel-chair bound Adolf Hitler.
Xavier realizes that his plans are at a critical stage and that nothing must jeopardize his success and so he summons the Lightning Squad.
At the same moment, Excalibur face an inquiry to determine whether or not they should be allowed to live. As Xavier calls out to them mentally, Kitty refers to the group as Lightning Squad. She tries to fight his influence but members of the Council view her outburst as a sign of her genetic inferiority and demand her execution. Meggan moves to defend her from the guards and things quickly devolve into a battle. During this fray, Nightcrawler teleports multiple times with ease, something he had not been able to do in recent months. Phoenix eventually uses her powers to subdue Kitty and restore order. Though he wishes he could order to their deaths, the commanding officer orders Excalibur to report to Moira MacTaggert immediately.
Upon arriving at Muir Island, the team is greeted by Doktor Moira MacTaggert, Reichsminister of Genetics! Phoenix finally understands what has happened: their world has somehow begun to merge with the alternate Nazi-dominated realm they had encountered before their Cross-Time Caper. Realizing that Moira may not have been completely subverted by her alternate reality persona, Phoenix encourages the team to seek her help.
Enraged by the horrors inflicted on the Kitty Pryde of the Nazi reality by Reichminister MacTaggert, Shadowcat refuses to listen to Rachel and punches Moira. Springing to Moira’s defense are the Reichsmen --- Nazi versions of Rogue, Banshee, Storm, Psylocke and Havok. The two teams battle briefly and Excalibur is winning the fight until Moira commands them all to stop.
She dismisses the Reichsmen and explains to Excalibur that she is going to help them. She explains that when the two disparate realities merged, each person experienced a re-birth. In this merging, the dominant physical and intellectual traits from the two realities remained. Thus her appearance changed to that of the Reichsminister but she retained her own personality and intellect. She asked for the team’s trust and commanded them to put on the garb of the Lightning Squad.
In his personal genetics lab, Herr Xavier takes the Red Skull on a tour of his facilities. Among his prisoners are the mutants who on Excalibur`s world were the original X-Men. Cyclops is a prisoner, the energy of his optic blasts drained and harnessed for Xavier’s use. Angel has been dissected for study, his skeleton on display as a novelty of mutation. Similarly, the Beast has been killed and studied in hopes of somehow strengthening the Reich. Iceman has been kept alive and subverted by Xavier. To prove his loyalty, Bobby Drake is aiding Xavier in his experiments on his former girlfriend, Polaris. In saluting the Red Skull, Iceman adds “Heil Xavier!” alongside “Heil Hitler” to the Skull’s great chagrin. The final prisoner is a defiant Jean Grey, held captive in a tank for rejecting Xavier’s advances. As they conclude their tour, the Skull informs Xavier that he has come to summon Xavier to an audience with the Fuhrer himself.
Xavier goes before Hitler who expresses his displeasure over Xavier’s focus on his own concerns rather than those of the Reich. Xavier becomes impertinent and insubordinate, accusing Hitler of being weak and delusional.
After Xavier storms out, the Red Skull reveals that he has been revitalized through successful experimentation. Hitler agrees to commence with the Red Skull’s unspoken plan for the glory of the Fatherland.
Excalibur, dressed as the Lightning Squad, teleports into the concentration camp. As soon as they arrive, Phoenix is overwhelmed by the psychic torment of those who have died there. After a slap from Nightcrawler, Rachel regains her composure and sends her teammates into the camp. Since she has no temporal counterpart in the Lightning Squad, she remains behind to telepathically reinforce their ruse.
The team enters the chambers of Herr Xavier who is angered that they did not respond to his mental summons sooner. Xavier reminds them that it is only through his efforts that they have been spared from the ghastly experimentations performed on most mutants.
Seeing Xavier as a demented Nazi causes the team to get anxious and when Rachel tries to psionically reassure them, Xavier overhears her thoughts and realizes that this is not his Lightning Squad. He manages to subdue the entire team with psionic bolts. Xavier’s plan to use Excalibur as a new source for psychic energies is cut short by Shadowcat who was able to withstand his psychic assault due to Phoenix’s shielding.
At that same moment, the Red Skull puts Hitler through the same process that rejuvenated him. As Hitler is restored to his prime, the Red Skull utilizes his Nullatron on the “Lightning Squad”, inescapably linking his mind with theirs and imposing his will over them. He then forces them to attack Xavier.
Elsewhere in the camp, another group of mutants are sacrificed by Xavier’s subordinates. This triggers Rachel’s power as the Phoenix and she lashes out at Xavier through the now-enthralled Excalibur members. The resulting psi-blast combines the Phoenix force with the power of the psychic death throes of the slain mutant prisoners and channels them through Rachel’s teammates. The attack is powerful enough to obliterate Herr Xavier’s mind.
The Red Skull is caught in the psychic backlash and somehow merged with Xavier, expanding and their joined consciousness to unimaginable levels. Hitler is left alone and unattended. He is still attached to the Red Skull’s revitalization equipment and continues to regress first to childhood, then to infancy and then into nothingness.
The cosmic balance is restored and the two realities separated as a result. Rachel explains what truly occurred to her bewildered teammates. The mental energies of Xavier’s victims coalesced and evolved into a single consciousness of vast power. Their anguished cries reached out and connected with the Phoenix Force resulting in the merging of their worlds. This consciousness then allied with the Phoenix Force to merge with Xavier’s corporeal form…thus transfiguring him into “The X-Man”, an evolved consciousness of immense power. Ultimately, Xavier’s corrupt experiments were a success.
As Rachel concludes her explanation, there is a knock at the door. It is Alistaire Stuart asking once again “Where were you?” For a moment, the team fears that their situation has not been resolved. Alistaire naively explains that he was just wondering where Kitty was earlier when he came by to work on a joint project. The team laughs heartily, telling Alistaire not to strain himself trying to comprehend all that has transpired.
On the Nazi-dominated Earth, the psychic form of the super-evolved “X-Man” watches over it protectively.
Rachel’s final words are that she has a strong feeling that this world has finally found a much-need savior.