Synopsis: The Doctor and Ace materialize on board a sea-going vessel. They step out to find a man dying in front of them. The Captain accuses them of murder, and throws them in the brig. Another doctor has already beaten them to the holding cell, though—and he's a bit on the mad scientist side. Cellmate Dr. Harding is obsessed with the cargo the ship is carrying: "blank" human embryos. The Seventh Doctor draws some conclusions from what Dr. Harding has been muttering, and alerts the Captain that it was the embryos, and not them, that killed the crewman.
The Captain releases the Doctor and he implores the Captain to put the ship on war footing and that they broadcast a distress signal. Ace goes to whip the remaining crew into fighting shape, only to discover that Daleks are on board. They, it seems, have been mutating these embryos into a new Dalek/human hybrid. Worse, the Doctor's flesh has itself begun to mutate.
Now confronted by a large contingent of Daleks, the Doctor choses to surrender. Noting that he is slowly being turned into a Dalek, they alert the Doctor that he will ultimately join them and pilot the Daleks on the ship back up to their orbiting spacecraft.
The Doctor senses an opportunity. He wills himself to mutate a bit faster so that he can establish a telepathic link with one of the new Dalek/human hybrids. He wills that Dalek to board the shuttlecraft on the freighter, and pilot it up to the orbiting mother ship. Only, he doesn't tell the Dalek to dock with the spacecraft. He tells it to ram directly into it, killing all on board.
With the Dalek threat over, and the mutation process reversed, the Doctor and Ace get back in the TARDIS and leave for new adventures.