The USS Enterprise pursues a Ferengi vessel that has stolen a T-9 energy converter from an unmanned Federation outpost. While the Ferengi race was known to the Federation, this is their first encounter with the species, and the Enterprise crew finds the Ferengi appear to be at a similar technology level as themselves. As the chase passes Gamma Tauri IV, both ships suffer from power drains causing them to come to a halt. Though the crews of both ships initially believe the power drain is caused by the other vessel, Captain Picard realizes that the Ferengi are as confused as they are, and orders the crew to investigate Gamma Tauri IV. Data reports that the planet seems to have once been a remote outpost of the "Tkon Empire" that became extinct 600,000 years ago. Picard contacts the Ferengi and gets them to agree to mutually explore the planet below to try to find the source of the energy drain, which has now started to affect the life support systems on both ships.
On the barren planet, the away team is momentarily separated due to planet's energy field effects on the transporters, but after regrouping, they are attacked and bound by the Ferengi, believing the Enterprise crew was planning an ambush of their own. The away team manages to get free, and begin to exchange weapon fire, but the shots from the Federation phasers and the Ferengi energy whips are adsorbed by a nearby crystalline tree. Data investigates the tree, believing it to be related to the energy field affecting the ships, and suddenly awakens an entity that displays itself as a humanoid and calls itself Portal 63, "a guardian of the Tkon Empire." Portal 63 asks the two groups if they seek to enter the Tkon Empire, and does not comprehend when it is told that the Tkon have long since disappeared. The Ferengi attempt to oust the Federation as a hostile force, which Commander Riker admits to. Portal 63 steps forward, appearing ready to attack Riker with a bladed weapon, but after challenging Riker of claiming his species is barbaric, Riker quotes Sun Tzu, "Fear is the true enemy, the only enemy." Portal 63 accepts this and stands down from its challenge, satisfied that the Federation is a civilized race, and allows the Enterprise to go free; it further offers Riker the opportunity to destroy the Ferengi vessel, but Riker declines. Both away teams return to their respective ships with power restored, and the Ferengi return the stolen energy converter. As a means of ironic thanks, Riker suggests sending the Ferengi a box of chinese finger traps, a toy that Data became fascinated by, and subsequently stuck in, earlier in the mission.