Solomon and another newcomer named Frank into tunnels below the city with the promise of work. What none of them now is that Mr. Diagoras answers to a higher authority: the Dalek Sec who has taken him on as a partner so that Diagoras construction workers can complete work to the empire state building. While under the city the doctor locates a green jellyfish-like mass. The doctor is accidentally lured into a trap by the pig creatures and the group are chased out of the tunnels (loosing Frank in the process) into the theater where Tellulah accosts them with a prop gun. Of course Tellulah is concerned for the same reason everyone else is: men are disappearing from the Hoover Ville. And all lured away by the same promise of employment that had just resulted in Frank being abducted. Meanwhile Sec is revealing his plans for his species to Diagoras, who has been called to his presence.
He and the other three Daleks in the city are the last four survivors of their species-part of a group called the Cult Of Skaro looking to create an evolutionary process in order for their race to survive. He than proceeds to physically absorb Diagoras. While Tellulah is performing in her show onstage as Martha looks on from wings while the doctor is analyzing the mass with a makeshift DNA scanner, he discovers it's an infant Dalek. By this time Martha has observed a man who looks like the Laszlo she saw in one of Tellulah's photos and motions for her to give chase as Laszlo runs away. The doctor follows them into the tunnels where Laszlo informs them, including reuniting with a confused Frank, how the pig men are genetically enhanced Dalek slaves made from human beings they have scanned to have low intelligence. But ones of higher intelligence are taken for another purpose. When the doctor and Martha are taken to the Empire State Building for that reason,the doctor instructs Martha to demand that Sec tell them what is being done. The Dalek armor on Sec opens and out of it emerges a cyclops Dalek/human hybrid.
One of the key elements over the decades of Doctor Who about the Daleks has been the fact that everything they do is motivated only by their understanding of themselves as the only superior species in the universe. Having died in the great time war the last surviving Daleks have only found one recourse for survival, one they never anticipated as ever occurring. The Cult Of Skaro's leader Sec has determined that the Dalek's must evolve, merging with a lower order species to survive and have chosen humans so they can be bipedal. Of course they also chose to do so during a time in human history when people were desperate and frightened to do any job to earn their livelihood. The doctor points out this irony that only one of his species to his knowledge has survived yet four Daleks have. In their quest to become the ultimate survivor, the Daleks have now been forced break their own understanding of themselves as the only species worthy of survival, and merge with humanity (far inferior in their eye) to continue their mission.