Bad Horse has insisted that only a murder will get Dr. Horrible into the Evil League of Evil, and now that Captain Hammer is dating Penny, his death seems to be the perfect choice. Will the prospective super-villain pull off his dastardly plan? And what will Penny think of him if he succeeds?

After accidentally introducing Penny and Captain Hammer in the first place, Dr. Horrible is devastated that they seem pretty close. He concentrates on his freeze ray heist but after another setback, Bad Horse insists on a special demonstration of evil.

We are introduced to Dr. Horrible who tells us through musical numbers about his plan for world domination, his arch nemesis; Captain Hammer and his long-time crush on the girl from the laundromat; Penny. Penny also happens to be falling for Captain Hammer after he 'saves her life.'