Using Stark tech (a top secret weapon designed years ago by Tony Stark for the U.S. Military, unapproved for being too expensive, and for having a design flaw), an unidentified person attacks and nearly destroys the Chinese Embassy in Washington D.C., causing hundreds of casualties, and wounded. Iron Man assists in the rescue.
Then Tony starts investigating who is behind the attack; it could be a known enemy, or someone from the U.S. Government, or from his own company. He first speaks with Nick Fury from S.H.I.E.L.D. Then he chats with Pepper Potts (troubled by her miscarriage, something her husband Happy Hogan doesn't know about, and about her declining marriage.)
Meanwhile, Happy drowns his sorrows in alcohol. Tony finds him in a tavern, and asks him to be sober since he needs his help. Happy blames Tony for his ruined marriage since he believes there's something going on between Tony and Pepper. Tony finally tells Happy that Pepper was pregnant, and when Happy hits Tony in the face, he gets a shot that was meant for Tony.