The Daleks kill Ronson with their pewpewpew guns that turn the things they shoot negative - the first time this has ever happened, except for in all the Dalek stories before this one.
The Daleks then set out to go and kill all the Thals. Some Thals are celebrating having killed all the Kaleds (except for Davros, his elite scientists, and the real baddys in the bunker: the Daleks) when they meet the Daleks, who say "Exterminate" to them and then negative them to death.
The Doctor and Bettan (a Thal, and a new character introduced this episode) hide so they escape. They split up and the Doctor meets Harry and Sarah who save him from an attack by random Mutos (as if the Daleks weren't enough).
Some Kaleds are still plotting against Davros, including Gharman and Kavell (Gharman was in previous episodes, but Kavell is another new character for part four), but Nyder is listening to them plot. Nyder tells Gharman that he wants to join their group if Gharman will meet him in the basement. They meet, and Gharman tells Nyder who is in on the plotting with him.
"Kavell, Frenton, Parran. But there'll be more sure, I'm sure of it.
"Thank you. That's what I wanted to know."
Davros was hiding down there too. Of course Nyder is loyal to Davros really and he knocks Gharman out. They hear a noise from the ventilator shaft - it is the Doctor, Harry and Sarah trying to sneak back into the bunker - so Davros and Nyder are able to capture them as soon as they come out into the room.
It cuts to showing the Doctor strapped in a chair, saving time by skipping - for the second time the episode - over the unnecessary details of how he gets from one situation to another. This allows us to come straight to what is important: the conversation between the Doctor and Davros. I will quote large portions of it because the dialogue is so good and gets right to the hearts of the two characters.
"Why did you come here?"
"To stop the development of the Daleks."
"Because, having lived in what you would call the future, I have seen the carnage and destruction they have caused."
"Then my Daleks do go on. They do survive."
"Yes. As weapons of hate. Machines of war."
"But there is still time to change all that. Why not make them a force for good throughout the Universe?"
"I could do it."
"Then do it. Be remembered for that."
"You have seen my Daleks in battle?"
"Many times. I have fought against them."
"And do they win? Do they always win?"
"Not always. They have been defeated, but never utterly defeated. The Dalek menace always remains..."
"If, as you say, they become the supreme creatures of war, how can they lose? How can they fail?"
"Misfortune. Lack of information. Sometimes overwhelming opposition."
"Yes, but tell me - how do the Daleks fail?"
"No Davros, that is a question that the future must keep secret."
"What mistakes do they make? You will tell me!"
"YOU WILL TELL ME!"
Nyder straps Harry and Sarah in chairs too, and Davros says the chairs will hurt Harry and Sarah unless the Doctor tells Davros "the reason for every Dalek defeat." Even the chairs are baddys in this story!
"Davros - if I tell you what you want to know then I betray millions of people in the future... I can't do that."
"But you can. You will tell me. You will tell me! YOU WILL TELL ME!"
This is the episode's cliffhanger ending, and in many ways it is the moment that the entire story has been building towards. The Doctor is now faced with the ultimate dilemma and, having come here to change history by destroying the Daleks early, there is now the ironic possibility that he will instead make them be even more powerful than they
Time travel is confusing.
This episode sees a bit of a change of direction for the story, mainly in how it is no longer about the Doctor preventing the Daleks from being made - the Daleks have been made, and they have now seen action for the first time and exterminated their first mannys - but also in how it is no longer about the Kaleds vs the Thals.
It is now Davros and the Daleks vs anybody left against them, and - with the Doctor captured - it feels as though the odds are now stacked in Davros's favour. The stakes are set high for the last third of the story, perhaps higher than they have ever been before in Doctor Who: it is the future that Davros and the Doctor are playing for.