Major Story Arcs
Attempt to Defeat the USSR with Psychics
August Masters is an official with the CIB--the Central Information Bureau. He wants to bring an end to the Cold War by utilizing psychics to devastate the Soviet Union.
At first he runs a series of experiments out of a sanitarium, where he has a handful of psychics held captive. However, one of those psychics is Mindy, Nighthawk's college girlfriend, now handicapped from a drunk driving accident he is responsible for. When he comes to visit her, he figures out something is going on, and investigates. Masters catches him and has the psychics attack Nighthawk's mind, but with a magical push from Clea, Mindy remembers her early love for Kyle and instead vents her fury on the machines.
Masters survives the explosion. Nighthawk tries to tell the media about what the government has been doing, but Masters uses his extensive connections to bury the story.
Later on, he masterminds an even larger operation under a mountain in Colorado. He captures Captain America, Hellcat, Valkyrie, and Gargoyle, using them as living batteries to charge up the group of psychics and their new controlling machine. He also has Nighthawk in captivity and shows him the new plan to psychically destroy the minds of everyone in the U.S.S.R.
However, Dr. Strange, Daimon Hellstrom, Beast, and Daredevil invade the base and release the prisoners. The psychics, meanwhile, manage to evade the machine's control and possess Kyle's mind, using him as a human instrument to destroy the base. He sets off the machine's self-destruct mechanism, eliminating Master's base and their machines.
Insanity in Another Dimension
However, Masters isn't killed as the Defenders assume. Instead, when the psychics try to use their powers to save Nighthawk, they accidentally send themselves and Masters to the Squadron Supreme's dimension instead. There, Masters lives as a fugitive, unable to understand what happened. He tries to assassinate that dimension's US President--coincidentally Kyle Richmond--who has seemingly been taken over by Overmind. However, it turns out that the man he shoots is a clone, and that dimension's real Richmond and the 616-dimension's Defenders stop Masters and Overmind (and Null the Living Darkness, who had been living in the clone Richmond), with the additional help of the six psychics, who fuse together into one entity and eventually end up living in Overmind's body. Masters loses his mind from all the metaphysical insanity, and the Defenders bring him back to the 616 Earth as a prisoner.