The Doctor and Rose discover that most of the population of this universe wear special "EarPods", devices that, when activated by a signal, download massive amounts of news and information directly to the wearer's brain, information that is also received by Rose's mobile phone. They learn that the EarPods as well as Pete's company are owned by the powerful John Lumic, owner of Cybus Industries, who is presently failing to gain approval from the Ethics Committee of Great Britain for his "ultimate upgrade": a method of sustaining the human brain indefinitely within a cradle of copyrighted chemicals and allowing its impulses to be bonded onto a metal exoskeleton. Lumic secretly has been capturing homeless people and putting them to work in his Battersea Power Station factory using the EarPods as methods to control the homeless. Having been denied permission by the President of Great Britain, Lumic tells his right-hand man Mr Crane to begin the upgrade process. Crane drives an International Electromatics lorry and kidnaps more homeless people, but instead of just fitting them with EarPods, he orders them into a room filled with cutting and other machinery which transforms them into the new prototypes.
Mickey arrives at his grandmother's house to find her still alive, but before he can get acquainted with her, he is grabbed by people in an unmarked van and taken to a country house. One of his abductors, Jake, who calls him "Ricky", tells him that he is the most wanted person in Great Britain, and that they have evidence of Lumic's dealing with the homeless people. When they arrive at the base, the real Ricky, Mickey's counterpart in this universe, is there, and explains he is the leader of the "Preachers" who reject the EarPods and have been tracking Lumic's actions. After clearing the confusion between the existence of Ricky and Mickey, the group learns of pending action by Lumic and, with Mickey in tow, make towards Pete Tyler's estate.
The Doctor and Rose arrive at Pete's estate and learn that there is a large party there that night, where the President of Great Britain and Lumic will be present. The Doctor and Rose pose as part of the serving staff to investigate, and learn that this Pete and Jackie Tyler are childless but have a pet terrier called Rose. Rose meets both Pete and Jackie and learns that they have just separated secretly. As the party gets underway, Lumic presents his plans for his prototype, which the Doctor recognises right away. Before he can act, the partygoers hear the sound of troops surrounding the building, an army of metal men, which the Doctor tells Rose are Cybermen. As the Cybermen break through the windows, Lumic explains that they have been selected to be upgraded to "Human.2", and that every human will receive a compulsory free upgrade. The President resists, and is electrocuted by a Cyberman who informs them that this is the only alternative to conversion. As Jackie flees into the basement with a Cyberman in pursuit, the Doctor, Rose, and Pete jump out a window and find the Preachers there, firing their ineffective weapons at the Cybermen. As the episode closes in a cliffhanger, the Doctor, Rose, Pete, Mickey, Ricky, and Jake are surrounded by the Cybermen who, deeming them incompatible for upgrading, announce they will be deleted and move in for the kill.
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