Synopsis
In #2 Wolverine seemed to be the only one in the new reality to remember the old one. (Actually New Avengers (2005) #45 will reveal that Skrulls currently impersonating certain characters, such as Jessica Drew in this issue, are also aware.) Last issue we were introduced to young Layla Miller, who also remembers but can also cause others to remember. Wolverine hooked up with Luke Cage's resistance group and they took Layla to wake Emma Frost up.
Emma can't figure out how Layla's power works. But then husband (in this reality) Scott Summers arrives home, and Layla returns his correct memories too. Cyclops quickly takes command.
The next recruit is Peter Parker, who really doesn't take the news very well that Uncle Ben and wife Gwen Stacy are really dead, and his son Richie doesn't really exist.
They pick up Kitty Pryde, Dr Strange and Captain Marvel (Carol Danvers). Tony Stark is fielding the press after the appearance of Iron Man in the IM:HoM mini-series. They also wake up lawyers Jennifer Walters and Matt Murdock to their real identities.
They skip over Steve Rogers, who is an old man in this reality after surviving WWII as Captain America, as seen in CA(2005)#10.
Emma puts forward the theory that Magneto must have made his daughter Scarlet Witch create this reality where mutants rule, and he rules them. He gave many of the the heroes their deepest desires in order to keep them happy. He must have somehow used Prof X's psychic power and Cerebro to discover those desires. And then he got rid of Xavier.
Hawkeye has resisted letting Layla show him reality, because he's been told that in that reality he's dead. But the problem is shelved as the SHIELD Red Guard (Jessica Drew, Mystique, Nightcrawler, Rogue and Toad) come knocking. But the fight is short-lived as Rogue grabs Layla and absorbs her power. Soon the Red Guard know the truth too.
Mystique isn't too happy to find her relationship in this reality with Wolverine wasn't real. And Hawkeye slips away.
In Genosha Lorna Dane tells Magnus (Magneto) that the guests are arriving for his party.