Hypnotia sinks a Russian nuclear submarine with all hands on board. A year later, the submarine surfaces near Scotland with its entire crew transformed into radioactive zombies loyal to the Mandarin.

Mandarin, Modok, and Justin Hammer revive an ancient and powerful robot named Ultimo. They develop a device to control it and send it on a mission to capture Iron Man.

The stock markets crash after a massive failure in a military early warning system. Mandarin and Modok are using the crisis for profit and manage to brainwash Jim Rhodes into turning again Iron Man.

Madarin uses Julia's daughter Rachel to lure Iron Man into a trap. In order to rescue her, Iron Man needs to overcome a serious power supply problem. Meanwhile, the military accepts a new tank design from Stark Enterprises.

Stark Enterprises developed an advanced stealth jet called "the Grim Reaper" for the American military. When Modok's minions steal the jet for the Mandarin, Iron Man must recover it.

When the Mandarin sends his men to steal an experiment boat developed by Stark Enterprises, the endangers the life of Modok's wife Alana. Modok approaches Iron Man in an attempt to protect her.