A fleet of warships are helmed by the 'felis sapiens', under the tyrannical rule of Rodon, Ray Fearon, the ruthless feral cat leader who has vowed to wipe out all cats who worship anyone but him. Three cat clerics are to be executed for this crime, but they manage to escape. They steal a shuttle and set course for their 'birthplace' to find their god. Meanwhile, Lister, Craig Charles, has spent weeks going through the areas of the ship that he has not investigated since he left stasis, including the cargo bays where amongst other things he finds the reboot-disc for Holly, the ship's computer who was lost years earlier. Booting it up, they discover that Holly, Norman Lovett, has been restored from his original startup file, and fails to recognise the crew. After discovering that the ship is all but abandoned and serves no logistical purpose, Holly follows his pre-programmed instructions to dispose of the ship by destroying it. Unable to convince him otherwise, Lister, Kryten, Rimmer and Cat, Danny John-Jules, all flee in Starbug to find a new ship.
They eventually stumble upon a ship called the Iron Star, a derelict vessel outfitted with technology that is far superior to that of Red Dwarf. Immediately they discover a new form of hologrammatic projection technology called Diamond Light, which is more powerful than Hard Light, giving holograms abilities akin to superheroes, merging hard light projections with soft light projections. Deciding to ignore all the safety precautions, Rimmer, Chris Barrie has his own program converted to Diamond Light, giving him amazing powers and choosing his superhero name as "The Mighty Light", but after a few minutes he shuts down. He discovers that by recklessly using the technology before running safety tests, he has destroyed his Light Bee's battery, which now only has a few minutes of power and thus he can only exist if he is plugged into a mains power supply. Exploring the ship more, they stumble upon the three cat clerics who instantly recognise Lister as their god. Lister tries to set things right, but Kryten advises against it as their faith is all they have. The clerics reveal they have fled from Rodon who seeks them and the Anubis Stone, a mystical stone wielding great power; however, Kryten quickly determines that the stone is actually polished beetle dung.
Rodon arrives to take the Anubis Stone, quickly departing back to his battlecruiser where he orders the Iron Star be fired upon. The Dwarfers and the three clerics all flee back to Starbug and leave before the destruction of the Iron Star, but damage taken by the debris causes them to crash land onto a desert moon. Rodon's ship catches up with them and gives chase, forcing them to hide in a sandstorm, only to end up trapped underground. Looking for help, Rimmer, who has become a black-and-white low energy setting, contacts Holly and convinces him to upload the last saved back-up files of the original Holly into his system, thus restoring his memories and previous 'computer-senile' personality. In an attempt to help them, Holly launches a mining torpedo which destroys the entire moon, throwing Starbug clear in the shockwave. Regrouping on Red Dwarf, they learn that Rodon and his crew are on the ship, and have come to return the Anubis Stone, seeing it as worthless. Before leaving, he leaves a bomb aboard Red Dwarf to kill them all.
Lister realises that the Anubis Stone's beetle dung shell is a top layer, and removes it to reveal the real Stone which is a source of immense power. Transferring this power to Rimmer reengages his Diamond Light form, and with seconds to spare Rimmer takes the bomb out into space to detonate harmlessly. Lister then leads an attack against Rodon, where he and Rimmer create a laser pointer aimed at Rodon so his own people attack him, causing his ship to lose control and hit an asteroid, destroying it and all aboard. Looking to reboot Kryten, who has been serving as Rimmer's power supply, they discover that his system is locked up and he cannot recharge. In order to save Kryten, Rimmer forgoes his superpowers and uses the Anubis Stone to restore Kryten back to life. The Dwarfers return the clerics to the Cat Fleet, where they thank Lister for showing them the true legend they should be following, revealing they now worship Rimmer as a god. The ships part ways and the Dwarfers return home.
