Weeks later, The Doctor and Martha land in the same city beneath the Statue of Liberty, and quickly discover that people have been going missing from the Hooverville settlement in Central Park - a place where the impoverished people stay during the Great Depression. They meet Solomon, the camp's leader, who tells them that people have been taken at night with no clues about who is taking them.
Meanwhile, the finishing touches are being put to the Empire State Building, with the work overseen by Mr Diagoras. The workers are unhappy but their boss says the new 'masters' demand that building continue with a special modification to the top. A Dalek then enters the room - accompanied by two pig slaves - and captures a disgruntled worker for their 'final experiment'. The creature orders Diagoras to bring them more bodies.
Diagoras enters Hooverville to recruit new workers for the sewers on a measly wage. Out of curiosity The Doctor volunteers and Martha accompanies him, alongside Solomon and a young man called Frank.
In the sewers, The Doctor discovers a strange, green organism on the floor that is not from Earth. Up in the building, Diagoras instructs the builders to place three Dalek side panels at the top of the Empire State Building by nightfall, a dangerous mission. A Dalek then arrives on the scene to chat with Diagoras and the monster from Skaro compliments him on the fact he has ambition and thinks like a Dalek.
Dalek Sec - leader of the Cult of Skaro - observes the conversation and orders the man to be delivered to him in preparation for a special experiment. In the basement, the pig slaves secure him in front of Sec.
In the sewers, The Doctor and the others are chased by the pig slaves and manage to escape through a manhole in the theatre, except for poor Frank who is captured. They bump into Tallulah, who tells them that Laszlo has been missing for weeks. The Doctor then gathers some primitive equipment and lighting so that he can investigate the DNA of the organism he found.
Diagoras is told by Sec that they need his flesh, although the other Daleks are concerned by the experiment breaching their imperative and purity. Sec argues that as there are only four Daleks left, they must evolve to survive. The human is then brought forward and is engulfed by the mutant contained within Sec's casing.
During a performance by Tallulah, Martha catches sight of a man with porcine features, but not as extreme as the others. She pursues him but is captured by a pig slave. The Doctor hears her screams and sets off in pursuit alongside Tallulah, having just found out that the organism is from the planet Skaro. They head into the sewers. Martha is put in a line with other captured humans, where she encounters Frank. The Doctor sees a Dalek gliding around and is angry that they have survived their last encounter.
The semi-pig man Martha saw is found hiding in the shadows. It emerges that he's Laszlo, who has escaped from the Daleks before their genetic experiment on him could be completed. Tallulah is shocked, but is nonetheless happy to see him again.
The Daleks scan the minds of the human prisoners for their intelligence, selecting those of lower mental faculties to become pig slaves. Those who are brainier, like Martha, are taken to the laboratory for other purposes. The Doctor jumps into the line of those with superior intelligence and reunites with Martha, with Laszlo accompanying them.
Inside the laboratory, the Daleks are preparing for the 'birth' of the creature inside Dalek Sec. His metallic casing opens up and a suited creature in a humaoid shape emerges, with a vastly mutated head with one eye, a bulbous double brain and tentacles dangling. Sec announces: "I am a human Dalek. I am your future..."