Synopsis
Tony Stark is demonstrating some riot-control equipment at a prison when Arthur Parks (the Living Laser from Avengers #34-35) makes a bid for freedom. Iron Man stops him, but Parks disappears. Iron Man thinks that looked like the Mandarin's teleportation method, but Mandarin's supposed to be dead. He contacts the Avengers to warn them that Laser swore revenge on them. (This issue follows #44, and Hawkeye is visiting Black Widow in hospital.)
Mandarin has indeed teleported Parks to his base, and given him a new costume. He has also gathered other Avengers foes Enchantress, Executioner, Power Man and Swordsman, and now pretends to try to recruit Sub-Mariner. But 'Namor' refuses to serve, and Mandarin obliterates him. However this was just a trick hologram to impress the others.
Mandarin reveals a giant synthetic diamond with which he says he can rule the world .
Iron Man arrives at Avengers Mansion and is attacked by Hercules who thinks he's an intruder. The fight is halted by Thor, who knows them both, and is here on his own mission to warn the Avengers that the Asgardian villains Enchantress and Executioner are back on Earth. The current Avengers turn up, and Captain America mentions he doesn't know where Power Man and Swordsman are since he last fought them in Tales of Suspense #88. Then Nick Fury contacts them to say that the 5 villains they have been discussing have led invasions in Asia, Africa and South America. Cap splits the Avengers into 3 teams to deal with each, while Cap himself and Quicksilver remain behind to try to find out who's behind it all. (Iron Man doesn't share his thought about Mandarin.)
The areas under attack are all rich in diamonds. Mandarin says only 1 invasion has to succeed. He says he can't lead any attack personally, but doesn't say why.
Power Man and Swordsman and a force of mercenaries are in South America (probably Brazil). The 2 super-villains leave the armies to fight it out, and take their air-rocket (more like a section of the FF's Fantastic-Car) to the Presidential Palace, where they menace the capital city with a giant floating explosive sword. Goliath and Wasp come to the rescue. After a fight where Hank switches between Goliath and Ant-Man modes, Swordsman causes the giant blade to fall. But ace in the hole Iron Man stops it and propels the explosive device into the jungle. The villains and their small army are soon rounded up. The heroes learn that they worked for Mandarin.
Somewhere in Asia (possibly India) Hercules and Scarlet Witch are battling Trolls led by the Executioner and the Enchantress. Executioner sends the Trolls away so he can fight Hercules god-to-god. Herc and Wanda hear Mandarin berate Executioner for this, until Executioner throws his communicator away in disgust, and uses his axe to take the 4 combatants to an extra-dimensional place he calls the Citadel of Silence. There Hercules battles Executioner, while Scarlet Witch's improved control over her powers allows her to stand her ground against Enchantress. Enchantress conjures up a Frost Giant, but Hercules hurls Executioner at it. The collision knocks Executioner out and destroys the Giant, while the feedback from the breaking of her spell renders Enchantress unconscious too. Hercules binds the villains with strands of Enchantress's hair (acting on advice from Thor), and leaves them for Odin's judgement. He and Wanda use Executioner's axe to return home (leaving the axe behind?).
In an African capital (probably of South Africa) Thor and Hawkeye face the remaining villain Living Laser. Thor allows Hawkeye to tackle Laser on his own, as an enemy of the current Avengers. But when Laser is subdued, it turn out he wasn't alone, as the giant Ultimo robot emerges from a volcano (as it did for Mandarin in China in Tales of Suspense #76-78). This gives Thor something worth fighting. But Ultimo's eye-beams are sufficient to deflect Thor's hammer Mjolnir away, and unless Thor finds it within 60 seconds he will revert to Don Blake. Thor dodges Ultimo's blasts until he finds the hammer just in time, and just in time to save Hawkeye from Ultimo. Thor then knocks the robot back into the volcano, and seals it up. And this pair of heroes also learns that Mandarin is behind it all.
Back at Avengers Mansion Cap has triangulated the source of Mandarin's transmissions, and he and Quicksilver borrow a military rocket to reach his base, which is an orbiting space station. The rest of the Avengers follow (without saying how).
Mandarin reveals his giant synthetic diamond and his masterplan. When fuelled by real diamonds it will emit a hate ray that will turn the inhabitants of Earth violently against each other. (The invasions were meant to take control of countries that were rich in diamonds.)
The few diamonds Mandarin has already are enough to turn each Avenger on the space station against the one nearest to him. God against god (Thor and Hercules), brother against sister (Pietro and Wanda), old foes Hawkeye vs Iron Man, and Cap fighting Goliath. But Wasp is near to Mandarin, so she attacks him, turning the hate ray off.
The desperate Mandarin switches on a battery of blast rays. But Quicksilver dislodges the weapons, and the blasts careen around the space station, starting to destroy it. Mandarin is sucked through a hole into space, which Thor and Hercules plug with the giant diamond. The Avengers escape in a rocket (not necessarily one any of them arrived in) as the space station explodes.