Long, long ago: Merlin the Wizard is locked in a dungeon and his captor Loki has gained control of his magic belt. Now Loki demands to know the secrets of this belt which he has used with only limited success. Merlin agrees and, as the Trickster bends nearer—Merlin spits in his face. And enraged Loki hurls a cup at him and walks out, announcing he will be back in a week. The sly wizard picks up the cup and uses the trace of residual magic on it to cast a spell….
1942: Super-soldier Captain America leads a team of US troops into the Red Skull’s secret laboratory. Cap has had a mysterious symbol etched into his palm, which enables him to open the lock and gain entrance into the deserted treasure room. There, Cap is drawn to a plain wooden cup and reaches out; when he touches it he vanishes….
Today: At a museum in Oklahoma, Jane Foster has asked Thor to help her identify some ancient Nordic artifacts. Ironically, the Norse God of Thunder is not very good at it since he is unfamiliar with earthly wares. She apologizes for her irritation, explaining her trouble with her brother and his constant pleas for help with his gambling debts. As she stands gazing out of the window, Thor picks up a plain wooden cup…and vanishes….
With a shock, Captain America and Thor find themselves on a road through a wooded area. They introduce themselves and try to figure out where they are. Cap sees a movement in the trees and flings his shield bringing down an assassin, as they hear the sound of oncoming riders, likely the killer’s quarry. Thor slams his hammer to the ground and four more assassins drop from the trees. At this point they spy a milestone that treads "Camelot," clearing up a few things. Moments later a trio of figures comes riding toward them: they are King Arthur, Sir Gawain, and Merlin the Wizard. But Thor recognizes Merlin as his mischievous brother Loki, and the faker gestures Thor to silence. Cap explains how they prevented an attempt to assassinate the King, and "Merlin" wipes the killers’ minds. The two heroes are invited to join the party as they transport the Holy Grail to Camelot. Thor questions Loki privately and the bad brother claims to have been transported there by a magical accident similar to Thor’s. Suddenly they are met by a two-headed dragon, and when they slice off a head, two grow back in its place, and they critically injure Arthur and Gawain. It is then discovered that Loki has seized the opportunity to make off with the Grail. While Thor battles the monster (revealed after its defeat to be merely a construct of Loki’s magic), Cap pursues the fleeing Loki on horseback. In the chase, the box containing the Grail is smashed and Loki snatches up the Grail, wielding the ultimate source of power. At a hint from Thor, Cap flings his shield and breaks Merlin’s belt of power. At this the face of the wizard forms out of the storm clouds in the sky and reveals that the belt did not grant him power but contained it. Without it he is now at his full terrible strength. Merlin announces he is going to send the Grail to another plane of existence as it is far too powerful to be left on Earth. Loki refuses to let go and he vanishes into a maelstrom of cloud with his "prize." Thor is distraught that he could not help his misguided brother. Merlin heals the King and his knight and sends the heroes back to their own eras….
Cap reappears in the treasure room only seconds after he left; Thor finds himself again listening to Jane describe her brother’s troubles. She shows him a battered tapestry of a figure that looks like Thor fighting a four-headed dragon, but it is obviously a fake since the hero is accompanied by a man dressed like the American flag. When she asks for his advice on her family problem, Thor asks her to help her brother….