The Doctor and Jamie are still at Gatewick Airport, having just said goodbye to Ben and Polly when they realize the Tardis is being stolen. After asking around, they find out the Tardis has been collected by a local antique dealer, Edward Waterfield. They schedule an appointment to see him but arrive early to scout about. The antiques they find are genuine, but brand new. Jamie says this suggests time travel.
As the Doctor and Jamie scout about they discover a dead body. As the Doctor examines the body it appears the man died in a gruesome fashion, with a horrified face. Further investigation reveals a secret room. The door suddenly opens and the pair walk in with Waterfield watching from a distance. The Doctor investigates a strange device but Jamie sets a trap and they are knocked out with gas. Waterfield steps in and activates the strange device. All three disappear.
The Doctor wakes up to discover he's been transported back in time to the year 1866 and in the house of Theodore Maxtible. Both Maxtible and Waterfield are experimenting with time travel via mirrors and static electricity. The word 'static' immediately peaks the Doctors interest. Maxtible admits they have allies who are working with them but Waterfield calls them monsters and is hesitant.
The Daleks are revealed to be the partners (as if you couldn't tell from the episodes title). They have kidnapped Waterfield's daughter and entice Maxtible with the power of transmutation to keep them working. The Daleks force the Doctor to send Jamie off to rescue Victoria so he can extract the human factor and inject it into the Daleks to help them defeat the humans.
The experiment has limited effect as the 'human factor' essentially turns the Daleks into children who want to play. All Daleks are called back to Skaro and the humans are brought along for further experiments. The Doctor meets the Emperor Dalek who actually wants to install the Dalek factor into humans. The Doctor makes the Emperor believe he has been turned into a Dalek but has instead given the human factor to more Daleks. A civil war is started and the Emperor, along with the Dalek base are seemingly destroyed. Waterfield sacrifices himself to save the Doctor, so the Doctor promises he'll take care of his daughter.
WHO: Victoria Waterfield
PLANET OF ORIGIN: Earth, 1866
REASON FOR JOINING: After her father dies, the Doctor promises to keep Victoria safe.
NEXT: A Unit of Fear