Ben and Polly have just watched the First Doctor collapse to the floor of the TARDIS and have witnessed him change from one person to another. Polly is convinced that the man is the Doctor, but Ben believes the man is an impostor. The TARDIS brings the newly regenerated Doctor, Ben and Polly to the planet Vulcan where, on arrival, the Doctor witnesses the murder of the examiner, a man sent from Earth to check on the human colony located on the planet. After checking the body the Doctor discovers a badge that gives him access to all the areas of the human colony, no questions asked.
A security team led by Bragen escorts the Doctor, Ben and Polly back to the colony. The examiner was summoned by Quinn, deputy governor to investigate a group of rebels. The governor regards the problem with the rebels as insignificant.
Meanwhile, Lesterson, the colony’s scientist, has discovered a crashed Dalek space capsule. The Doctor goes to investigate the capsule and after having a quick look inside he says that’s enough for one night and goes off to bed.
Later that night, Ben and Polly see the Doctor heading towards Lesterson’s laboratory and go inside the Dalek capsule. They follow, and he opens an inner compartment to find two Daleks inside. He deduces that the third Dalek is missing from the capsule. Polly, who, along with Ben, had joined the Doctor in the capsule, spots a small mutant crawling across the floor which disappears into a small opening. Polly screams.
The Doctor, Ben and Polly leave the capsule to find Lesterson, who immediately starts questioning them on why they are in his lab. The Doctor says that his badge (the examiner’s badge) says that he can go anywhere in the colony. The Doctor questions Lesterson on where he has put the third Dalek. He is afraid that Lesterson might be trying to reactivate it.
Once the Doctor, Ben and Polly have left, Lesterson opens a secret compartment where he has hidden the third Dalek. He gets his helpers Resno and Janley to help try and reactivate the Dalek. He is successful, but in the process the Dalek shoots Resno dead. Janley assures Lesterson that Resno will be fine, although she knows he is dead. At that point Lesterson removes the gun stick from the Dalek.
Meanwhile, Quinn has been accused of sabotaging the communication console and summoning the examiner. Quinn is put on trial and the governor gives Bragen Quinn’s old job. The Doctor, Ben and Polly attend Quinn’s trial, during which Lesterson arrives with the reactivated Dalek, who claims to be the colony’s servant. The Dalek recognises the Doctor and from that point on Ben believes he really is the Doctor.
Lesterson also reactivates the other two Daleks and removes the gun sticks from them. They also claim to be the colony’s servants.
The Doctor notices that there are more than three Daleks in the colony and warns that they are breeding. When told that machines can't breed the Doctor answers that Daleks are not machines.
The Doctor, Polly and Ben are imprisoned. The Doctor is seen rolling pieces of fruit along the floor causing Polly to state that this is the sort of behaviour that makes them wonder if he really is the Doctor. It turns out that the Doctor is checking if the fruit contains a bugging device. They manage to escape when the doctor generates the correct tone to open the prison cell by making a partly filled wine glass chime.
One night Lesterson goes inside the Dalek capsule and discovers that Daleks are being manufactured there. He sees an inert mutant being placed on a stand then suddenly coming to life. It is then lifted off the stand by a Dalek and placed into a Dalek base and the top fitted to the base.
After a long fight between the humans and the Daleks, during which Governor Hensell is killed by Bragen, The Doctor destroys the Daleks by turning their own power source against them. It turns out that Bragen sabotaged the communication console and killed the real examiner. Quinn has the charges against him dropped and Bragen is shot by Valmar after attempting to kill Quinn. Quinn is made governor and the Doctor, Ben and Polly return to the TARDIS. An inert Dalek stands next to the TARDIS. Ben kicks it and exclaims that they won't be having any trouble with Daleks from now on. The TARDIS then sets off on another adventure. As the TARDIS dematerialises the eye stalk of a nearby Dalek corpse rises upwards...