The three chapters are to be taken as happening concurrently.
Generation Next (Chapter One)
To some humans, mutants are simply a scary step on the evolutionary ladder. Humans are unable to top this next phase naturally. Not content with this state of affairs, both Stephen Lang and Cameron Hodge allow themselves to be assimilated into the Phalanx. This act, they hope, will ensure that humans have a leg-up on the evolutionary ladder. One problem stands in the way of mutant domination: mutants cannot be assimilated into the Phalanx. For this reason, the Phalanx goes after the next generation of mutants, so as to find some way to cure the mutant immunity.
Banshee visits the X-Mansion and notices that the X-Men are acting odd. Running a computer scan, he learns that the only mutants in the mansion are himself, Emma Frost, Jubilee, and Sabretooth. The four manage to get free and learn of the Phalanx objective of finding the newer mutants. They are able to save one, Synch, before heading to California (a lead they got from following Husk's psy-trail from when she got captured). There, Emma and Banshee break into a SHIELD base and trace the Phalanx signature to a boat in San Diego.
The Phalanx is successful in capturing Husk, Monet, Blink, and Skin. In their cell, they band together and find a way out of their cell, only to come face-to-face with the Phalanx. Fortunately, Banshee and company arrive to save the younger mutants, but it is only Blink who can actually save the day. She teleports the Phalanx away, leaving her new friends safe.
Life Signs (Chapter Two)
At Mont St. Francis, Professor Xavier has assembled the collective teams of Excalibur, X-Factor, and X-Force. He alerts the teams of the Phalanx threat, having started when the Friends of Humanity got a hold of Warlock's remains. They initially wanted to use the remains as a way to change humans into a way to be the next breed of Sentinels, but the hosts became a part of the collective and the Phalanx evolved faster than the humans had intended. Instead of finding a way to eliminate the mutant threat, the Phalanx grew to trying to eradicate life on Earth.
Wolfsbane and Cannonball hear of the incarceration of Douglock and go to inspect him to see if he is a reanimated Doug Ramsey. Forge joins them and sees the wonder of a new life form, as Douglock is a being that has broken off the Phalanx collective. Douglock then kidnaps the three visitors and takes them to Italy where the Phalanx has built a spire to communicate to the originators of the Phalanx. Douglock, Cannonball, and Wolfsbane travel to the top of the tower in hopes of jamming the signal to the stars.
Meanwhile, a Phalanx leader has turned Forge's mutant power against himself. Forge is shown the glory of bringing on a new race and he is unable to stop himself from caring for the incubators of the Phalanx. The incubators hold the next generation of Phalanx, a fail-safe in case the transmission isn't able to get through to the Phalanx originators. Fortunately, Nightcrawler is able to talk Forge into rebooting how Forge's mutant power operates and Forge is able to destroy the incubators. At this point, Douglock supposedly sacrifices himself by throwing himself onto the beam to space. The Phalanx is undone and breaks down. Douglock survives, however, since he has things left to live for.
Final Sanction (Chapter Three)
Cyclops and Jean Grey return from their honeymoon to find the X-Men have been kidnapped. They head to Muir Island to meet up with the Professor and find out how they can help; instead they find the island overrun with Phalanx. The Professor, however, had sent a message to both Wolverine and Cable before leaving the island and the two meet up with Cyclops and Jean Grey in time to prevent the Phalanx from getting their hands on Moira MacTaggert's research. The research is needed so that the Phalanx can learn how to assimilate mutants into their collective. To stop the Phalanx, Cable and Jean stage a psionic assault on the Astral Plane while Cyclops and Wolverine sneak in and take the information. The mutants learn that the Phalanx collective is located in Tibet, blow up Moira's laboratory, and head to finally eradicate the Phalanx threat.
In Tibet, Stephen Lang has realized that the Phalanx has gotten out of hand. He wants mutants eradicated, but he sees that humanity will suffer, as well. He constructs a plan that he hopes will stop Cameron Hodge and the Phalanx for good. Oddly enough, his plan involves the X-Men. He talks Psylocke into being his mole. She is "assimilated" and is able to regain her mind when given the command to attack the other X-Men. This comes to pass when Wolverine gets passed the Phalanx defenses, puts a small hole in Bishop's energy containment chamber, and gives Bishop an energy source. Blasting the X-Men out, the Phalanx citadel is taken down. While Lang thinks he's pulled himself out of the danger and in a position to further his quest of mutant genocide, Hodge pulls Lang into the collapsing citadel.
The next generation of mutants would form a group called Generation X and be led by Banshee and Emma Frost.
Due to the combined psi-attack of Jean Grey and Cable, Cable is able to catch some hints as to who Slym and Redd (the couple who raised him) actually were.