Xavier is still comatose after days, psychically at war with himself as a result of something the alien Brood did to him while he was their prisoner. He can feel that an alien consciousness has become part of him and is now slowly stripping him of his humanity. Meanwhile, his students and loved ones are gathered around him, unable to help him. The Starjammers' doctor, Sikorsky, announces the grim diagnosis that Xavier's internal battle is going to kill him, if it isn't resolved soon.
Moira explains to the recently arrived Cyclops their attempts at treating Xavier's condition. His mental defences, she informs him, have prevented them from succeeding. Xavier, she says, even possessed fellow telepath Oracle and tried to commit suicide with her help. Cyclops brushes that thought off and leaves the room. He's furious because, as Wolverine surmises, he's gone through this kind of situation before when he lost Phoenix, without being able to help her. Storm asks the worried Corsair to let her handle Scott and follows her teammate outside.
As the sun sets behind them, they exchange some meaningless pleasantries. When Storm mentions that she actually prefers this island to their Westchester headquarters, Scott snipes that, thanks to her decisions, they might have to stay here for quite a while. He shows her a newspaper with the headline "Mutants Wreck Pentagon" and angrily states that the X-Men can't afford this kind of publicity. Storm may feel that their secrets are safe now, but at what price to their reputation? As he starts to doubt her capacity as a team-leader, Ororo angrily snaps that if he wants his job back, he needs only ask for it.
Calmer, Scott apologizes. He has snapped at her, because he feels worried about Xavier and about the unfairness of the situation. He opens himself up to Ororo and explains that he sees Xavier as a father. He feels reminded of Jean, even his life at the orphanage. Whenever he makes himself vulnerable to someone by caring about them, they leave or die. As he sarcastically notes his self-pity, Storm consoles him and points out that while they all walk in the shadow of death, none of them is ever truly alone either.
Back inside, Lilandra desperately tries to reach Charles via the telepathic rapport they share. She begs him to fight. Xavier's mind is elsewhere, however. He's reliving events from twenty years ago.
Flashback to Haifa, Israel, 20 years ago:
After leaving Cairo, Xavier has taken up an invitation by his friend, Daniel Shomron, a psychiatrist. Daniel enthusiastically greets Xavier and tells him that he has now specialized in working with Holocaust victims. He remembers from the war that Xavier was a miracle worker as a psychologist and, therefore, asked for his help. Shomron has his own hospital, whose staff consists of both professionals and volunteers. Shomron introduces one of those volunteers to Charles: Magnus, a man who, while not old, still has completely white hair. Xavier notes with fascination that Magnus may not be telepathic, but he still has natural psychic defences on a par with Xavier's. He then notes the tattooed number on Magnus' forearm. Magnus calmly explains that he grew up in the death camp, Auschwitz.
Magnus and Shomron lead Charles to one of their hardest cases. Gabrielle Haller, a young Jewish woman from the Netherlands, so traumatized by her childhood experiences in the German concentration camp, Dachau, that she withdrew into a catatonic schizophrenia and hasn't improved since, despite all their efforts.
Secretly, Xavier uses his telepathy to enter Gaby's mind. He encounters a huge wall on the astral plane and monsters emerging from the wall - Gaby's attempt to defend herself against the intruder. While wondering about the ethics of his decision, Charles destroys both the monsters and the wall. He then is confronted by the memories of ten-year-old Gabrielle. He relives with her how she was sent to the concentration camp, and how she survived because the guards took a shine to the pretty girl. The final memories make no sense to Charles though; in the last days of the war, the commandant magically transforms Gaby into a statue of solid gold.
Gaby awakes crying for her parents, leaving Magnus and Shomron astounded. After questioning Gaby and putting her to bed, the three men celebrate, but also wonder about Gaby's descriptions. What is the meaning of the image of the golden statue? Xavier assumes that the memory has to be somehow grounded in reality, but, other than that, he has no idea.
Outside the office a stranger - apparently a Nazi - observes and notes that Gaby is at last awake and intends to inform his leader about this development.
Over the next weeks, Charles and Magnus help Gaby to acclimatize to her new life in Israel. The two men, noticing they are intellectual equals, form a friendship themselves. They often discuss - hypothetically of course - the evolution of a new race of super-beings. While Charles believes that co-existence is possible, Magnus, scarred by his experiences, is convinced that Homo Superior could only survive if they subjugated humanity.
Gaby, in the meantime, falls in love with Charles. While he is aware that it isn't truly love, just mutual need, Charles suspects there won't be any harm in it. However, one evening they, and the entire Hospital, are attacked by armed, masked men. The Israeli troops fight back, but not soon enough to prevent that Charles is momentarily stunned and Gaby is abducted. While the assault craft with Gaby onboard escapes, the others, suddenly and inexplicably, come apart at the seams, killing the agents inside. Equally as astonishing, the explosions don't harm the hospital or the Israeli soldiers below.
Recovering from his wound, Charles sees Magnus on the roof, surrounded by a nimbus of light, and realizes that he is responsible. Charles confronts Magnus with the cruelty of his methods and Magnus once more chides his naivety. Shomron joins them: the Israeli troops have a prisoner. Xavier identifies the man as Rudolf Kranz, formerly of the Waffen SS, now an agent of the newly formed HYDRA Brotherhood and reads his mind to learn of HYDRA's plans.
(Two days later, near Kenya´s Lake Rudolf:)
Former SS members have come together to form a new criminal cartel. One agent runs into the camp excited, announcing that they have found the cave. The leader, Baron Strucker, chides him for his carelessness, but he is clearly in a good mood, since he doesn't kill the boy for his mistake. Strucker turns to the chained Gaby, whom they have to thank for the coordinates. Gaby is desperate - she would have rather died than tell them, but she was too weak to withstand the torture.
Xavier and Magnus have infiltrated the HYDRA camp, wearing their uniforms. When Charles 'sees' that they have tortured Gaby, Magnus has to calm him. They don their masks and follow the others into the cave. There, they see Strucker, who rants about the great plan: in the final days of World War II, Hitler's personal gold reserves were shipped out of Germany in order to eventually finance a Fourth Reich. Gaby was to be made into a living map, but something went wrong with the conditioning process and Gaby went mad, until Xavier helped her. In the meantime, the agents breach the wall, revealing a huge mound of gold bullion. Strucker rants that, with this gold, Hydra will bring the democracies and the communists to their knees.
Magnus and Charles, in the meantime, have made their way to Gaby and want to sneak out with her, but Gaby doesn't believe them and cries out. Magnus orders Charles to use his PSI-powers to quiet her. Charles is momentarily taken aback that Magnus knows about his powers and, in that moment, they are discovered by HYDRA. Charles runs with Gaby in his arms, while Magnus deflects the bullets of the attackers. Mentally, Xavier goads the other agents into fighting each other. As Magnus joins them, they notice that Gaby has fallen back into her catatonia. Magnus suggests that Charles use his powers to bring her out again, but Charles is afraid that, by doing so, he'll make her completely dependent on him. She needs the will to live, he concludes, and urges Gaby to fight.
They are joined by Strucker, who attacks them with a technological gauntlet called the Satan's Claw, which grants him superstrength. Magnus, however, crushes the gauntlet with his powers - and the hand within. Hurling the former Nazi away, Magnus tells him that, unfortunately, his powers manifested themselves at adulthood, when the war was over. Otherwise, the Nazis' tyranny would have ended overnight. Strucker angrily retorts that their great ideals live on and will prevail. Magnus concedes that possibility. Let humanity follow the Nazis to damnation, he doesn't care, he exclaims. Homo Superior will rule the world. At the same time he creates an exit above them and levitates Charles, Gaby, the gold and finally himself out, before collapsing the cave around the Nazis.
Outside, Xavier inquires after Strucker and his men and asks Magnus what he intends to do with the gold. Magnus once more reiterates how naïve Charles is and that he will eventually learn the same lessons Magnus did. Mutants will not go meekly to the gas chambers, he states. They will fight and win. Wishing Charles farewell, he flies away with the gold. Charles is distracted, because at that very moment, Gaby awakens from her catatonia. She tells him that she knew,she was safe behind her walls, but she wanted to live and Charles' voice showed her the way back.
Back in his bed, Charles awakes with Gaby's name on his lips. He thanks his friends, especially Lilandra. Her voice gave him the strength to return.
With Xavier on the road to recovery, Lilandra must take her leave as duty calls her home. However, she has a farewell banquet planned on the newly arrived yacht, Zreee Shar. Charles and Illyana stay at home, both still needing time to recover. The Starjammers have no great love for the Shi'ar, meaning that only the X-Men and their friend, Carol Danvers, attend the party, all dressed up to the nines in Shi'ar finery. As Lilandra commends their heroic deeds, she suddenly breaks off in mid-sentence, as though she were catatonic. While the X-Men debate what to do, Deathbird walks in, claiming that they are all beyond help and proclaiming herself the new Shi'ar empress. The X-Men attack, but, at that moment, the stasis bomb beneath the table explodes, stunning them all. Satisified, Deathbird hands the heroes to the Brood, who intend to use them as hosts for their queen's eggs.