In Medisuela, General Navatilas sends his men into the jungle to recover the missing shield of Captain America as a trophy. To their horror they discover the shield—in the hands of the Punisher, who survived the explosion in the village. The vigilante hero kills a soldier with his knife, allowing him to seize the man’s gun and slaughter his compatriots. Nearby, Captain America is in chains and being tortured by the General’s men. Punisher sends Cap a warning by Morse code and sends in the shield with a small bomb attached. Cap uses the distraction of the explosion to escape from his bonds and overpower his captors. The two Americans then find themselves under siege by a party of the General’s soldiers but the enemy weapons turns out to be from the cache of defective guns sold by the mysterious figure in the US government. The weapons explode after brief use, killing all of the attackers. Cap and the Punisher head off to find the General….
Later on the battlefield, the ghoulish immortal Terror comes across a severely wounded survivor of the battle. He helps himself to one of the dying man’s eyes and moves on….
In the United States, Attorney General Roger Mollech is frustrated that the President will not approve his suggested invasion of Medisuela, which the drugs to money to defective weapons scheme had as its ultimate goal. His aide Angela Stone orders the Defense Intelligence Agency team led by Colonel Max Kalee to proceed with the takeover which is already in progress….
Terror stops by General Navatilas’ office and with the stolen eye he is able to see the outcome of the battle between his troops and the two American heroes. The weird being offers the General some unwanted advice about coming to terms with his fate, kills the three soldiers ordered to stop him, and leaves….
As they prepare for the coming battle, both Captain America and the Punisher reflect on the events that made them what they are; Cap says it is an honor for him to serve his country, preventing the US from being dragged into a criminal’s war. Punisher responds that he is fighting for justice for the innocents against the guilty who must be punished and it is an honor to serve them too. At this point, Colonel Kalee and his team attack the Medisuelan capital in Apache helicopters. The two heroes respond with all the firepower they can muster, knocking the bids out of the sky one-by-one. While Kalee himself takes on Cap, his two henchmen Cain and Kane find General Navatilas begging for asylum at the gate of the Catholic Church. Cap beats Kalee and rips the American flag insignia from the traitor’s uniform. Punisher comes upon Kane and Cain after they have murdered Navatilas and impaled his body on the spiked fence. After a fast and furious knife fight, Punisher kills his two foes. Terror suddenly appears out of the night, offering to use the dead General’s body parts to tell them who is behind the whole scheme….
At a Dallas airport, Cap and Punisher intercept a departing plane. Punisher pursues and guns down Angela Stone while Cap seizes and beats up Roger Mollech. Punisher is shocked by the violence of Cap’s attack and warns him not to betray another symbol; Cap was in control, though, and appeals to his ally to put some faith in himself as well. Punisher shoots Mollech in the kneecap and they await the authorities.
Later, the two men, in civilian cloths, meet at Arlington National Cemetery. Cap tells Punisher his attempted murder of Cap will be overlooked. Punisher presents Cap with his Vietnam Combat Infantry Badge and walks away. Steve calls out to "Captain Castle" and salutes. Frank Castle, soldier, returns his salute and departs.