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Note: The previous issue notes that it was the final issue Bill Mantilo would be writing and that in this issue, Terry Austin takes over the writing duties of Cloak & Dagger – but the credits on the splash page show Bill Mantilo as the writer.
Note II: The previous issues had one half of the book being specifically about Cloak & Dagger and the second half about Doctor Strange. This issue combines both into one book. By this time, Doctor Strange has seemingly reincarnated the souls of the New Defenders (Andromeda, Manslaughter, Valkyrie and the Interloper).
The issue begins with Tandy (Dagger) slipping into the Holy Ghost Church and telling Tyrone (Cloak) that she had been at the University checking on the possibility of them taking classes there. Tyrone shares the fact that he’s had the dream again – about the man imprisoned in the darkness of his cloak (which, unknown to Tyrone is actually Nightmare in disguise) seeking the aid of Doctor Stephen Strange to free him. Tandy explains that Doctor Stephen Strange was killed by the Beyonder (this is actually not true; but rather a spell Doctor Strange cast in Strange Tales (Volume 1) #30). Cloak says that Stephen Strange is not dead; and that he can somehow sense him. So Dagger steps inside of the shadows of Cloak’s shroud and they teleport to a distant castle. They discover the former members of the New Defenders (Valkyrie, Interloper, Manslaughter and Andromeda) enjoying themselves festively. Dagger freaks out because she can’t sense any life light in them. Valkyrie explains that they all willingly gave their lives in order to fight the Dragon of the Moon (see Defenders (Volume 1) #152 for more details). Interloper explains that the fight with the Dragon of the Moon did not truly kill them; but left them in a battle in a real between life and death; and that Strange had recently needed them and made a dark sacrifice to free them from that limbo to enjoy life for one day and night.
Stephen Strange arrives and his mystic in training, a creature named Rintrah notes that how is it that Cloak knew that Stephen Strange was alive when he had cast a spell making all of the world believe he was killed by the Beyonder. Rintrah suspects that there is evil at work, but Stephen Strange explains that he has had to commit some dark deeds himself of late, and he can feel the torment radiating from Cloak. He attempts to use magic to peer inside of Cloak’s shadows when a large white hand bursts free from the shadows and grabs him; and begins pulling everyone in. Strange manages to get off a spell to save Rintrah from being pulled into the shadows.
They land in Nightmare’s plane of existence, and Nightmare has Stephen Strange firmly in his grasp.
Note: The second half of the story, that normally focuses strictly on Stephen Strange, is written by Peter Gillis.
Nightmare explains how with Stephen Strange captive, he can now unleash his nightmares upon the waking world now. He squeezes Stephen Strange and his body explodes; but it reforms, as Doctor Strange uses dark magic to manipulate his body. His hands begin to disfigure, like a demon’s hands. Nightmare laughs that Stephen Strange has resorted to dark magic and unleashes his own darkness upon Stephen Strange. The Defenders rush to his aid, but Nightmare unleashes nightmares to keep them busy. The darkness within Cloak runs wild and Dagger tries to sedate it with her light but she can’t. Strange explains that there’s a chance – but there’s a large risk. Dagger agrees to it, thinking it might impact her; but instead Strange casts a spell that kills Cloak. Valkyrie is then able to open a portal and take his body and soul to the beyond, and the rest of the Defenders follow. Dagger refuses to let Cloak go, even though the realm beyond is full of beautiful light. Nightmare laughs that they’re leaving Stephen Strange behind. Dagger turns and channels the light from the realm beyond and strikes Nightmare, once again, banishing him, and freeing Doctor Strange. Together again, they’re able to easily escape Nightmare’s Realm.