Blade: The Iron Cross

In 1944–45 Elisa experiences vivid nightmares about Elsa's death and Major Kraus, which she realizes are psychic memories drawn from Blade. She also envisions Blade in distress and looming threats, signaling events that will transpire. The channel between Elisa and the puppet Blade begins to bind their fates.

Blade is the only puppet capable of slight movements as his elixir dwindles, spending time hiding behind a trunk or watching Elisa bathe. He feeds on Elisa's psychic energy, and their bond deepens when she bleeds while sharpening his dull knife. Elisa also uses her powers to peer inside Blade to glimpse his past life.

Dr. Hauser continues the Deathcorp Project at a California hideout, funded by the corrupt US District Attorney James D. Madison who secretly supports the Nazis. The Scroll of Osiris remains central, with Madison possessing secret files that include puppet profiles. The stage is set for a deadly Nazi scheme against California.

Blade sneaks out at night to the factory where he hides under a sheet, beginning his solo mission against the Nazis. He is confronted by Officer Bruce, who taunts him before a brutal fight ensues. Blade fights back, using his eye spikes to wound and ultimately kill Bruce.

Gloria Vasquez and her henchman infiltrate Elisa's apartment, tearing it apart in search of Blade and the Scroll of Osiris. They discover the scroll behind a painting and capture Barney Barnes to take him back to Hauser for experiments. Blade observes from a closet before moving to the window to follow them.

James D. Madison uses a smoke bomb at the Daily Herald to knock Elisa and Detective Joe Gray unconscious and drag them back to Hauser's hideout. Blade hides behind a shelf during the abduction. The stakes rise as the heroes are secured and the plot advances.

In the hideout, Hauser tortures Elisa to extract the Scroll translation while Joe Gray is chained and wounded. He reveals plans to deploy a giant Death Ray to kill half of California's population and reanimate the survivors as Nazi-controlled zombies. Elisa endures the pain but remains defiant.

Elisa's psychic link intensifies as Blade cuts through the hideout, freeing Joe and cutting a path toward Hauser. He fights through resistance, taking down henchmen and evading gunfire as he advances toward the mastermind. The battle is marked by rapid, brutal close-quarters combat.

Hauser uses the torture machine to turn Barney into a zombie slave who targets Blade, but Barney attacks Gloria instead. Blade then kills Gloria by stabbing her throat and finishes Barney by severing a leg and delivering a fatal blow to the head. The operator of the torture device is slain as Blade pursues Hauser.

Hauser grabs Blade with his mechanical hand and attempts to crush him in a furnace. Elisa feels every strike through their psychic connection as Blade's body is reduced to ash, but Blade is reborn from the bio-energy and fights on from inside Hauser's belly before donning his hat and resuming his human visage.

Blade's reborn energy enables him to break into the Death Ray chamber. With a wrench handed by Joe, he disables the inner mechanism and triggers an explosion that destroys the hideout. Elisa, Joe, and Blade escape unharmed as the Death Ray's threat ends for now.

Elisa prints a sensational story about a killer puppet foiling a Nazi plot, though the Daily Herald's tabloid reputation leaves readers skeptical. Joe and Blade resolve to track down more double-crossing Americans aiding the Nazis, setting up future confrontations beyond the film's events.