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Continuing from the previous issue, the mysterious manipulator is revealed to be the Red Skull, thought dead after his last encounter with Captain America. The Skull explains that in their last encounter, he leaped into the ocean after the Cosmic Cube, and sunk out of sight. He says that although he failed to obtain the Cube, it's energies gave him the power he needed to survive without oxygen, and so he was able to escape to the surface. He then headed to Seagull Island, a secret installation provided for him years ago, and planned Captain Americas death. The Skull then uses his plastic bubble to send Cap a floor below, where he is attacked by a robot.
Captain America manages to defeat the robot, before tiny missiles are fired at him. Not trusting himself to escape them, Cap taunts the Skull that the missiles are below him, and so the Skull calls them off and sends in his greatest henchman: Bucky Barnes! Bucky attacks Captain America, saying that Captain America was jealous of him and wanted the spotlight all for himself. As the fight continues, Captain America throws Bucky into a wall, correctly deducing that it was just a well-built robot. The Red Skull congratulates him, before pulling a lever which causes the walls around Cap to start close in on him.
The Grey Gargoyle has just turned Iron Man to stone, and thrown him off the roof of Stark Industries so that he'll shatter. Luckily, Jasper Sitwell is outside and at ground level, and manages to save Iron Man by getting into a nearby truck full of sand and driving it below him, cushioning his fall. Whilst Sitwell manages to save Iron Man, the Grey Gargoyle returns to the inside of Stark Industries, and finds the cobalt weapon which he was looking for last issue. By the time he gets outside, Iron Man has returned to normal, and confronts him.
Iron Man manages to shoot the cobalt weapon out of the Grey Gargoyle's hands with his repulsor rays, but the Gargoyle is still too close to the cobalt weapon, so Iron Man hesitates before getting it. As Sitwell starts to reach for it, the ceiling suddenly caves in after being weakened last issue. Sitwell manages to survive by touching the Grey Gargoyle, so that he turns to stone and is safe from the collapsing ceiling. Iron Man then chases after the Grey Gargoyle, and works out how to defeat him. The Grey Gargoyle decides to use the cobalt weapon against Iron Man, but Iron Man uses his chest transmitter to short circuit it, sending the energy back into the Grey Gargoyle and changing him to normal. However, the power drain on his chest plate knocks him out, just as Jasper comes outside. With no idea what to do to save Iron Man, Jasper decides that he'll remove Iron Man's helmet.
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