Emperor Reinhard celebrates with his staff and focuses on the organization of domestic positions and issues within the Empire. Meanwhile Frederica and Yang marry and enjoy their private time. The Imperial government keeps an eye on Yang's new life, but does not interfere. Julian and Mashengo arrive at Merkatz's secret base. The Merkatz fleet is only 60 ships, but they plan to procure more from raids and decommissioned Alliance ships. Julian meets Katerose von Kreutzer for the first time. Poplan joins Julian's group to Earth. Till the fleet is needed once again, Merkatz plans to maintain and safeguard it.

On the long trip to Earth, Julian and Poplan review the history of Earth. The lesson starts with the 13 Day War between Earth factions in 2039 AD. After the nuclear exchange, the unification of all governments on Earth occurs in 2129 AD. Following unification man expands into the stars. However, the lack autonomy to colonies, unequal economic polities, and tyranny from the Earth government culminate in multiple conflicts and human rights violations. The end of these chaotic conflicts eventually leads to the creation of the Galactic Republic in 2801 and Earth being forgotten.

Emperor Reinhard announces his new cabinet. Through a personal favor to Hildegard's father, the new secretary of state, Reinhard agrees to visit Künmel. During the lunch, it is revealed that Künmel and the Earth cult had placed explosives under the court. Trüniht leaks information to the chief of ministry police Kesler; an assassination attempt is planned on Reinhard. The Earth cultists around Odin are attacked in full force by the military police. Reinhard disables the trigger, via Künmel complacency. The Mariendorfs are put under house arrest. July 10, 799 S.C. / 1 N.I.C.: Julian crew arrives on Earth, that same day the Empire decides to suppress Earth by force.

Oberstein confronts Reinhard to choose a consort for bearing a heir. Reinhard releases Hildegard and her father from house arrest. Reuenthal reveals to Mittermeyer that his personal demons are effecting his lifestyle. At this time Reuenthal also gives up his ambition for power, realizing he can not exceed Reinhard. Müller launches his fleet from Odin towards Earth. Julian, Mashengo, and Poplan arrive on Earth and head to the Earth Cult holy temple.

On Odin, Reinhard reviews the secret history of the past Emperors of the Empire. On Heinessen Yang is enjoying his private life. Lennenkanpt is uneasy with Yang's quiet life, being vigilant he increases surveillance. Fredrica decides to learn how to cook better for Yang, she consults Cazellnu's wife. During this period, both women realized they can trade information inside the food.

July 17, 799 S.C. / 1 N.I.C.: Alliance forces in accordance with the Treaty of Barlat start decommissioning and disassembling Alliance cruisers and carriers. The Merkatz freedom fighter fleet launches a sneak attack on the Imperial flagship, causing many planned decommissioned soldiers and ships to switch sides. Oberstein tricks Lennenkanpt into blaming Yang. Yang is arrested in his home by Alliance soldiers. All of Yang's subordinates notice increased surveillance as a sign of danger. If Yang is executed by the Empire, it would cause a popular uprising in the Alliance. The uprising would thus give the Empire a reason to subjugate the Alliance further. The Alliance government thus considers executing Yang before the Empire, to avoid interference or subjugation

Prime Minister Lebello visits Yang in prison. Yang realizes he will be used as a scapegoat by the Alliance to avoid Imperial intervention. Schenkopp and Attenborough reorganize Yang's subordinates. With the Rosen Ritter in full rebellion, the Alliance troops are no match for the difference in battle experience and morale. During the chaos, the Rosen Ritter kidnaps the Prime Minister. However, the Alliance military decides to sacrifice the PM and execute Yang early. Frederica and Schenkopp save Yang at the last moment, escaping with Yang's staff into the night.

July 22, 799 S.C. / 1 N.I.C.:The turmoil on Heinessen expands. Yang debates Lebello on the state of the nation. Lebello agrees to exchange his freedom for Lennenkanpt. The Rosen Ritter infiltrate the Imperial Consulate, kidnapping Lennenkanpt and causing massive casualties on the Imperial side. While in captivity Lennenkanpt hangs himself, too ashamed too live. Fredrica applies make up to Lennenkanpt's corpse, tricking the Imperials. Cazellnu resigns his post in the Alliance government and joins Yang's fleet with his family.

The Wahlen Imperial fleet arrives near Earth orbit. An Earth Cultist within Wahlen's flagship attacks Wahlen with a poisoned blade. Wahlen's arm is amputated and he goes into a coma. Meanwhile, Julian and Poplan realize the food being served to cultists has minute amounts of Thyoxin, a mind control poison. Julian goes through withdrawal symptoms, and meets up with the others in the infirmary. Wahlen awakens from his coma and orders a ground assault and missile bombardments of the Terraism fortress. The Imperial forces and Julian's friends (Posing as Phezzan infiltrators.) work together against the Earth Cultists. Julian and the others escape with the Terraism data while the cultists detonate the Earth cult fortress.

Julian convinces Wahlan to escort him to Odin. The Imperial admirals discuss the issue of Lennenkanpt's capture and the unverified accusations against Yang. Oberstein argues that the subterfuge within Heinessen could be very advantageous to the Empire. The Admirals all reject Oberstein's conclusion and opportunism, preferring to investigate the plot for the truth. Yang's fleet heads towards Merkatz's base. During this trip, Yang considers the miscalculations leading up to his capture as well as the next steps needed. Reinhard formalizes his plan of moving the Imperial capital to Phezzan. August 13, 799 S.C. / 1 N.I.C.: Planet El Facil declares independence from the Empire and Alliance.

Rumors spread around the Alliance on the whereabouts of Yang and Lennenkanpt. El Facil, the only independent planet not under Imperial supervision, aggressively tries to recruit Yang. Yang decides to remain on the sidelines. The reasoning behind's Yang's caution is due to the Yang fleet not having enough military power to protect El Facil or any other systems. Yang decides his next action depends heavily on the Empire's next move. On Heinessen, Lebello considers the possibility of Yang allying with the Empire for revenge as well as asking Yang to return and lead the Alliance. Reinhard receives a report on the truth behind Yang's movements and Lennenkanpt's actions. Reinhard summons his three top Imperial Military commanders...

Reinhard considers the possibility of Yang joining the Empire. Hildegard considers the different power groups at play. The current balance of power is divided between the Empire, the Alliance, Yang, El Facil, Phezzan merchants, Earth Cultists, and Goldenbaum loyalists. Yang is seen as a possible unifier of the Alliance, El Facil, and Phezzan merchants. Meanwhile Silverberche, the Imperial Secretary of Industry starts construction of the new Imperial capital in Phezzan. During a high level staff meeting, Reinhard decides that the Galactic unification of humanity is vital.

Reinhard announces the situation to all citizens within the galaxy. Reinhard covers the failure of Lennenkanpt and the selling out of Yang and Lennenkanpt by the Alliance government. He further declares Treaty of Barlat's spirit has been desecrated with the only solution being force. Yang realizes that he has been cut off from allying himself with the Alliance government. Bucock returns from retirement. The next day, Reinhard announces the fleet organization for the second Ragnarok operation. Alliance diplomat Odets desperately heads into Imperial territory to ask for a ceasefire.

On Odin, Julian and friends prepare to leave the planet. Alliance Chief of Staff Trung Yu Chan prepares to send Yang supplies, ships, and personnel. Around the Alliance, the military is sending Yang all of their extra personal, ships, and supplies. Yang consults with his staff, considering asking Phezzan merchants for war funding. Yang's fleet finally decides to go to El Facil. The government on El Facil plans to declare a new legitimate democratic government.

The Imperial forces head deeper into Alliance territory. Julian and friends arrive on El Facil. Julian passes off the Terraism data disk to Yang. Yang and stuff discuss the next step, namely the retaking of Iserlohn Fortress. The El Facil government is wary of Yang being outside of their field of control, thus they refuse to let Yang lead the next operation. Effectively Yang has become a bargaining ship for controlling the excesses of his subordinates. Yang speaks with Konev about the possibility of Phezzan's aid. December, 799 S.C. / 1 N.I.C.: The El Facil fleet, under Merkatz launches for Iserlohn. During the same time, the last of the Alliance fleet launches for their final sortie.

All military campaigns for both the Alliance and Empire are put on hold to celebrate the new year. Admiral Lutz starts receiving multiple conflicting launch and Iserlohn defense orders. Reinhard is furious at Lutz's refusal to launch. Lutz finally launches with all his forces, hoping to sandwich the El Facil fleet between him and Thor's Hammer. The Rosen Ritter disable the Thor's Hammer with a previously encoded computer lock down code. The enemy infantry forces are superior in numbers, but not in skill or morale. The Rossen Ritter eventually enter a backup control room and fire the Hammer at Lutz's returning fleet. January 14th, 800 S.C. / 2 N.I.C.: Iserlohn is once again under Yang's control.

The Imperial fleet decides to accept Bucock's challenge head on and sends most their ships to meet in the Mar-Adetta system. The Mar-Adetta has unstable solar activity, communication jamming and a corridor through an asteroid belt. The Bucock fleet hides in the large corridor. As the Imperial fleets charge in, they are greeted by unstable asteroids, artillery ship fire, and space mines. The Alliance fleet is astute and attacks from unexpected areas within and behind the belt. January 16th, 800 S.C. / 2 N.I.C.: The Imperial fleet is in the middle of an unexpectedly difficult battle.

Bucock's fleet advances through the Müller fleet while being pursued and surrounded by many others. Bucock's Alliance fleet is unable to charge and kill Rienhard. Hilde advises Reinhard to offer surrender to Bucock. Instead of accepting defeat, the Alliance officers toast to friendship and democracy. Afterwards, the Imperial fleet decimates all remaining Alliance ships. The Imperial victory celebration is cut short when news of Lutz's defeat at Iserlohn is received. The situation has changed for the Imperials if the plan was coordinated. The Imperial fleet would have cut off supply lines if Phezzan fell as well. With that possibility, Reinhard could have underestimated the importance of Iserlohn. Countering the panic, Hilde points out Yang would not have sacrificed his allies for a stall. The Imperial forces thus resumes their course for Heinessen.

The news of Fleet Admiral Bucock's death reaches Iserlohn. The Yang declares a mourning period for Bucock. Lebello is assassinated by his subordinates. The Alliance government surrenders unconditionally. On February 9th, Reinhard lands on Heinessen. The Imperial soldiers discover low level bureaucrats unwilling to surrender public documents, records, or property to the Empire. Reinhard commends on how the Alliance perished precisely because such remarkable government servants were kept below positions of governance. Reinhard disgusted over treachery, then declares death upon Lebello's killers. February 20th, 800 S.C. / 2 N.I.C.: The 273 history of the Free Planets Alliance ended.

Reinhard considers when and how to take El Facil and Iserlohn. Yang considers the position of his forces. Katerose von Kreutzer confronts her illegitimate father, General Schenkopp. The Iserlohn reviews the Terraism data disk, discovering troublesome information: Phezzan and the Earth Cult have been working together for over a century. Yang, Frederica, and Julian talk about the role of military within government as well as Reinhard's next step. In a secret location, Rubinsky discusses his influence and agents. Meanwhile, within Reinhard's office, a letter arrives which postpones the expedition to Iserlohn...

Reuenthal is arrested by the Imperial police under suspicion of overthrowing Reinhard. It is revealed that Lang, the head of the secret police initialed the investigation. Reuenthal is accused of harboring a woman of the exiled Lichtenlade family. Oberstein is suspicious of Lang's intentions. It is revealed that the woman is pregnant with Reuenthal's child. Reuenthal is granted a hearing from Reinhard that very afternoon. Reinhard and Reuenthal reminisce on the past. The Imperial officers direct their hatred toward Oberstein.

Wahlan, Mecklinger, and Kesler discuss the security and happenings of the old Imperial territories. A huge fire breaks out on Heinessen, causing massive property damage and casualties. Through Reuenthal's meticulously planned emergency countermeasures, the situation is handled efficiently. The Patriotic Knights Corps are made scapegoats for the fire. Reuenthal is relieved of his position as Chief of the High Command and made Governor General of all previous Alliance territories. Rubinsky plans to an assassination attempt at Princess Grünewald, Reinhard's sister. March 23rd, 800 S.C. / 2 N.I.C.: Admirals Bittenfeld and Fahrenheit lead their fleets to secure space around Iserlohn.

Bittenfeld sends Iserlohn a message, advising Yang to surrender. The government of El Facil retreats to Iserlohn. Julian and Katerose have an argument. Yang and Julian discuss their situation, talking till sunrise. The Earth Cult convinces Fork to try to assassinate Yang. Iserlohn responds to Bittenfeld, planning to provoke him to attack prematurely before the main Imperial fleets arrive.

Bittenfeld is wary of the message and takes a cautious fleet formation. Yang takes advantage of the communications jamming between both sides of the corridor and tricks Mecklinger into withdrawing to the entrance of the Imperial side. The Bittenfeld fleet is lured into the corridor by Attenborough's fleet. Fahrenheit's fleet follows Bittenfeld, planning to overwhelm the Yang with numbers. Yang uses the superior numbers of the Imperials against them, forcing the Imperials to cluster together inside the tight corridor. High Admiral Fahrenheit is killed in battle preventing the complete destruction of the two Imperial fleets.

Attenborough's fleet lines the entrance of the corridor with mines. He plans to snipe the Imperial fleet as they come through small holes within the minefield. The Imperial fleet creates 5 entry holes through the minefield to establish a bridgehead. Steinmetz is killed in battle. The Imperial fleet movements are sluggish within the corridor. Reuenthal orders the Imperial fleet to feign a retreat. The Yang fleet approaches the Reinhard's flagship but is unable to penetrate the battle line. Both sides withdraw.

The Imperial fleets adopt a tactic of attrition via rotations. The Müller fleet, Mittermeyer's subordinates, Bittenfeld and many other Admirals rotate on the battle line. Yang's fleet, with less that 20,000 ships left fights on with no rotations in manpower. Bittenfeld's elite troops cause a fatal blow to Yang's fleet. Admiral Fischer, the one in charge of Yang's fleet maneuvers is killed in battle. Reinhard passes out from sickness. A ceasefire is announced. The Yang fleet passes out in Iserlohn.

Reinhard confides in Hildegard that his memories of Kircheis motivated him towards ceasefire talks. Yang discusses the situation with his staff. The death of Fischer basically cut off the legs from Yang's fleet. Yang decides to accept the ceasefire talks. Yang leaves Iserlohn with minimal military personnel and the politicians from El Facil. Fork's ship finds Yang's ship en route to the Imperial fleet. Behind Fork two Imperial destroyers fire on Fork, killing him. Back on Iserlohn, the crew receives word of an assassination attempt by Fork. The Imperial ships requests a meeting with Yang. The crew behind the ships are in reality Earth Cultists in disguise. Patrichev and many others are killed defending Yang. Schenkopp with his Rosen Ritter arrive on Yang's ship. Yang is shot in the leg. June 1st, 800 S.C. / 2 N.I.C.: Yang Wen-li dies from blood loss at the age of 33.

Julian finds Yang's body. The Yang staff return to Iserlohn. The crew of Iserlohn enter mourning. Julian tells Frederica about Yang's death. It is decided by Yang's remaining staff that Frederica will assume the role of political leader. Julian is considered to be the next military leader. Julian accepts the role of military leadership after talking with Frederica. Unrest within Iserlohn grows and there is talk of desertion. Admiral Murai speaks with Julian and gives him his resignation. Murai intends to fulfill his last task for Yang by taking all dissidents from Iserlohn with him as a desertion leader. The remaining leaders of El Facil abandon the Yang fleet.

Reinhard is devastated at the death of Yang. Müller is sent as official Imperial envoy in condolences for Yang's death. Mittermeyer and Reuenthal discuss Yang's death and the new peace. Reinhard while sick, continues autocratic reforms. Reinhard is regretful of Silverberche's death. Hildegard, being in a military position is not able to cross over to domestic political advise. Reinhard realizes that outside of himself, Hildegard, and Silverberche, there is not anyone with skill in politics equal to his admirals in military affairs.

Lang finds the terrorists that bombed and killed Silverberche via a tip from Rubinsky. Rubinsky convinces Lang to kill Nikolas Boltik on suspicion of killing Silberberche. Many admirals within the Imperial Military are wary of Lang's influence. It is revealed that Rubinsky has Elfriede von Kohlrausch, the mother of Reuenthal's child. Reinhard officially orders all government servants and their families to move to Phezzan, the new Imperial capital. Trünicht accepts an outragous joke position from Reinhard in Heinessen. Oberstein considers purging members of the Reinhard staff.

The last of the deserters leave Iserlohn. Reuenthal appoints many government officials as he settles as the new governor of the old alliance territories. Reuenthal plans to execute Trünicht for any suspicious actions. Phezzan merchants notice Earth cultists entering Trünicht's home. Julian ponders how Yang became the personification of the spirit of democracy. Julian also realizes that he must ironically acknowledge the effectiveness of terrorism in history to shape Yang's death into something practical. Katerose and Julian talk about Fredrica. On August 8th, Space Calendar 800, New Imperial Year 2, the Iserlohn republic is born. The population comparison is 40 billion in the Empire to 940,000 in Iserlohn.