An enormous artifact is discovered in hyperspace and is towed to Babylon 5 for investigation. The xenoarchaeology corporation Interplanetary Expeditions sends a representative, Dr. Elizabeth Trent, Shari Belafonte to take control of the artifact's examination.
The artifact begins to influence the dreams of many inhabitants of Babylon 5, eventually controlling many of them during their waking hours as well. These thralls, led by Deuce, William Sanderson first demand that the excavation be accelerated, and then become increasingly violent toward the rest of the Babylon 5 population. Dr. Trent conjectures that the artifact is a Jumpgate that takes one neither to normal space nor to hyperspace but to a third space (hence the movie's title). With the reluctant support of her colleague, they order the device to be turned on, without notifying Captain Sheridan, Bruce Boxleitner.
Sheridan and Delenn, Mira Furlan visit Lyta Alexander, Patricia Tallman who, transmitting a "race memory", explains that the gate was built by the Vorlons a million years ago with a purpose that cannot be expressed in human terms except as an attempt to make contact with the gods. The Vorlons discovered that Thirdspace is a parallel universe inhabited by a violent, telepathic alien species even older and more powerful than the Vorlons that is bent on exterminating all life other than their own.
Long ago, the Thirdspace aliens telepathically converted a small army of Vorlons to fight and die for them. The ensuing battle ended in a stalemate; the non-thrall Vorlons shut down the gate, but the remaining Vorlon thralls prevented the artifact's destruction by sending it into hyperspace where it was lost but preserved (in hopes that it might one day be reawakened). Lyta then telepathically informs Captain Sheridan how to deactivate the gate.
When the device is finally reactivated, the Thirdspace aliens stream out from the portal in small fighters and begin a devastating assault on Babylon 5, obliterating large cruisers with little effort. The Thirdspace fleet is highly advanced and the single-occupant fighters possess deflector shield technology, making them extremely hard to destroy. The violent behavior of the individuals under the artifact's control is intended to disrupt the station's defenses. The struggle is ended when Sheridan uses a thermonuclear device to destroy the artifact just as the first wave of Thirdspace heavy warships begins to emerge. Once the artifact is destroyed, the telepathic influence stops and the station returns to normal. Trent, shaken by the way in which the artifact affected her, turns over her final report and goes on an indefinite hiatus.
Sheridan and the others conceal the true nature of the artifact from those who ask questions and confidently assure themselves that the incident is unlikely to occur again. In private, Lyta broods with the knowledge that the artifact was only one of many mistakes the Vorlons have made.
