A distraught Steve Rogers dreams that, as Captain America he is facing all of his old enemies; he outruns them but is unable to escape his greatest foe: a masked giant who claims to be his opposite…. Steve wakes up and realizes that the nightmares are caused by the locked room murder at the end of the previous issue. Elsewhere, the Red Skull, Aryan bigot that he is, determines to destroy the interracial couple of Peggy Carter and Gabe Jones. A henchman questions his plans and the villain launches into a tirade about his previous defeat (issue #148) and how he escaped the death plunge from the Sleeper by grabbing a guy wire and swinging to the ground. This only made him more determined to strike terror into the hearts of Americans so he revived his wartime trademarks of Chopin’s Funeral March and the Dust of Death—which he then dashes into the faithless henchman’s face.
At the home of the Skull’s next victim, Oscar Brenner, Cap, the Falcon, Peggy, and Gabe try to convince the skeptical economist he is in danger. Cap comes on very strongly, which the others attribute to his bitterness about Roscoe’s death. Suddenly, the Red Skull’s men burst into the room; Cap and the Falcon fight them off but the thugs manage to capture Peggy and Gabe and jet off with them. The Falcon is unable to catch up to them and returns to the home where he and Cap puzzle as to why Brenner was left unharmed. Brenner then lights his pipe, sending a cloud of the Dust of Death into his face, killing him just as his clock strikes out Chopin’s Funeral March. [In Virginia, Sharon Carter confides her romantic troubles to Dave Cox—without giving away Steve’s secret—as Dave bemoans to himself the fact that he is in love with her.]
At the Red Skull’s hideout Gabe spits in the villain’s eye and the Skull prepares to torture him and Peggy, while elsewhere Cap and the Falcon search the city for any sign of them. At dawn, a limo approaches Cap and Hugh Jones, President of Roxxon Oil (rescued by Nomad in issue #181), gives him the address of the Skull’s whereabouts and drives off. As the tortured Peggy again spits in the Skull’s eye, Cap and the Falcon come crashing through a window and take out the Skull’s men. Cap overpowers the mastermind and stands over him, vowing to make him pay, when at a sudden command from the Skull, Falcon hits Cap over the head from behind. The dark secret: "the Falcon is a creation of the Red Skull!"