B5 receives reports of mysterious attacks on merchant shipping, Captain Sheridan, missing the feeling of being in a fighter ship decides to take a wing of Starfury fighters and personally investigate the problem. A Narn fighter is then shown being attacked by a mysterious alien warship; the Narn pilot is brought aboard the alien ship by a tractor beam. When Sheridan and his fighter wing arrive the alien the warship attacks them; most of the fighter wing is destroyed and Sheridan is captured. A single fighter returns to Babylon 5 and informs the command staff of what has happened. General William Hague, the Chairman of the EarthForce Joint Chiefs of Staff and a friend of Captain Sheridan, arrives at Babylon 5 to meet with him. When he learns that Sheridan is missing, he calls in Sheridan's old ship, the Agamemnon, to assist with the search. Aboard the alien vessel, Sheridan is tortured by his alien captors and forced to fight other aliens who appear to be under some sort of mind control. Among his opponents is the captured Narn fighter pilot; Sheridan eventually convinces the Narn to help him rather than fight him.
Meanwhile, Ambassador Delenn is summoned by the Grey Council to decide her fate. Although a member of the Council, her decision to undergo the physical change into a half-human, half-Minbari hybrid has stirred strong feelings against her on the Council and in Minbari society. The council ridicule her physical change, but Delenn offers a passionate defense of her actions. However, they votes to remove her membership and she is replaced by Neroon of the Minbari warrior caste, disrupting the balance between the three castes (worker, warrior, and religious) that had existed for a thousand years. The Council tells her that she may return as Ambassador to Babylon 5, but regard her status as a joke.
Delenn intercepts messages from the station concerning Sheridan's disappearance and names the alien race as the Streib. Sheridan and the Narn pilot manage to escape the Streib warship whilst the Agamemnon and a squadron of fighters attack. The vessel dumps the rest of its captives into space and is subsequently destroyed. Back on the station, Sheridan tells Hague that the command staff at B5 are loyal to Earth and are "good people". Hague then informs Sheridan of his belief that President Clark had President Santiago killed so he could take over the Earth Alliance; Hague also suggests the Psi Corps may be pulling the strings. He intends to expose Clark's conspiracy and he asks Sheridan to help him; Sheridan agrees. He also decides to ask his command staff for help in uncovering the conspiracy.
Delenn is removed as a member of the Grey Council and the warrior caste gains an extra voice on the council; the new division of 4 warrior, 3 worker, and 2 religious caste is an unprecedented deviation from the traditional 3-3-3 division.
First reference to the existence of three castes within Minbari society. Specifically, the worker caste is referenced for the first time; prior episodes had only mentioned the religious and warrior castes.
We learn that Sheridan was posted at Babylon 5 to secretly determine the loyalty of the command staff; he reports to General Hague that Ivanova, Dr. Franklin, and Security Chief Garibaldi are all loyal and trustworthy.
Sheridan and his command staff agree to secretly help General Hague uncover evidence proving that President Clark conspired to kill President Santiago.
Although he is not identified by name until his appearance in season 3, this episode marks the first appearance of Ta'Lon, a Narn who becomes a student of G'Kar and eventually an important figure in Babylon 5 (played by Marshall Teague).
Hague reinforces Sheridan's belief that the Psi Corps is running the clandestine operation on Earth
Kosh is aware of Sheridan's capture, and there is some sort of mental connection between the two.