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It starts on an alien world, with grey-skinned beings moving cargo for a different kind of grey-skinned being when two carnival entertainers arrive via the luggage belt. These two colorful characters, Vorg and his assistant Shirna, are immediately under suspicion by the xenophobic ruling class on this planet.
And then the scene completely changes as the Doctor and Jo arrive in the TARDIS (her first trip post-exile, it seems) on a cargo ship in the Indian Ocean, and not Metebelis III as the Doctor was shooting for. We then move back and forth between these two disparate locations for a bit, unsure what's going on -- though Vorg gives a clue to those paying attention: "Roll up and see the monster show! A carnival of monsters, all living in their natural habitat, wild in this little box of mine. A miracle of intragalactic technology! Roll up! Roll up!" And then to reinforce the point, the Doctor and Jo are hiding from the crew when a plesiosaurus rears up out of the Indian Ocean -- an impossibility if this really is 1926 Earth. In addition to this there are other clues for the Doctor and Jo: a metal plate in the deck floor that only the Doctor and Jo can see, the fact that it's broad daylight outside when it should be pitch dark, and the strange jumping back of the clock in the cabin. The Doctor also notes that they're on the SS Bernice, which, he says, vanished from the Indian Ocean on 4 June 1926 -- the date that the calendar in the cabin reads.
Meanwhile, Vorg and Shirna are trying to convince the official species (as Pletrac refers to his race) that they should be allowed to stay, and that their Scope is harmless. "Our purpose is to amuse, simply to amuse," Vorg explains. "Nothing serious, nothing political," he adds. But a fault has developed inside their machine, and as the Doctor and Jo head back to the TARDIS, a giant hand reaches down and plucks the TARDIS up, thus providing a memorable cliffhanger.
Episode two makes it clear what's going on: the Scope is essentially a miniaturized zoo, with different creatures and habitats all in their own self-contained environments and conditioned to follow the same set of events over and over again. Their personalities can be adjusted a bit, as Vorg demonstrates by increasing the aggression of the Tellurians (aka humans), leading to Lieutenant Andrews (as played by Ian Marter) declaring he's going to thrash the Doctor "within an inch of his life" before chasing after the two stowaways around the ship, trying to shoot them. "I can't leave it for too long or the specimens start damaging each other," Vorg says, and turns the aggrometer back down, leaving the crew to cheerfully walk away from the bemused Doctor and Jo. Still, now the Doctor and Jo can remove the metal plate, revealing a hole that leads to complex circuitry (in a rather lovely set design from Roger Liminton) that they can investigate.
Outside the Scope, the officials are making the lives of Vorg and Shirna miserable, finally announcing officiously that the Scope should be destroyed -- only the Eradicator that they use isn't successful: the Scope is damaged but not destroyed. "Who's going to pay good credit bars to see a blob in a snowstorm?" Shirna complains afterwards. Meanwhile the officials are growing even more paranoid, wondering if Vorg and Shirna are spies sent to destroy them. When Orum investigates the machine, he finds nothing but a piece of a bric-a-brac: the TARDIS, which then grows to full size as the effects of the Scope's compression field wear off.
But the Doctor and Jo have broken into a completely different part of the machine, consisting of flat marshland. Shirna realizes from watching on the Scope's screen that they've entered the environment of the vicious Drashigs ("They're great favourites with the children, you know, with their gnashing and snapping and tearing at each other," Vorg notes happily) , who will stop at nothing to hunt down their prey once they get their scent. And as the Doctor and Jo look, a giant Drashig head rears out of the water, its mouth gaping open, roaring at them...