Chapter 5: Captain Hydra, the First Thunderbolt

In 2011, researchers in the Arctic Circle uncover the buried wreckage of a large, wing-shaped aircraft. While investigating the aircraft's interior, two of the researchers discover a frozen, circular object with a red, and black motif. In March 1942, HYDRA forces led by Johann Schmidt invade a stone church in Tønsberg, Norway, seeking a mysterious cosmic artifact known as the Tesseract, which possesses untold powers. Upon discovering the true Tesseract, Schmidt has the Church Keeper who guarded it killed, along with everyone else in the village.

In 1943,Peggy Carter is in New York to watch the Project Rebirth developed by Abraham Erskine. While attending Stark Expo with the private Lorraine (the cameo character played by Natalie Dormer), she is contacted by Erskine that tell her that she is the only valid candidate to the priject, a "super-soldier" experiment being conducted by the Strategic Scientific Reserve under the supervision of Erskine, Chester Phillips, and herself.

During basic training, Phillips is unconvinced by Erskine's claims that Carter is the right person for the procedure, but he see the bravery of Carter. The night before the treatment, Erskine reveals to Peggy that Schmidt underwent an imperfect version of the procedure and suffered negative side-effects due to his inner ambition for power and obsession with becoming a "superior man". However, he tells Peggy that he trust in her personality. Back in Europe, Schmidt and Arnim Zola, using one of his machines, successfully harness the energies of the Tesseract, intending to use the power to fuel Zola's inventions. Meanwhile, Schmidt, having discovered Erskine's location, dispatches an assassin to kill him.

In New York City, Erskine subjects Peggy to the super-soldier treatment, putting her in a special chamber where she is injected with the Super Soldier Serum and dosed with "vita-rays". Peggy emerges from the chamber with superforce. After witnessing the success of the experiment, one of the attendees reveals himself to be Schmidt's assassin, Heinz Kruger, who shoots Erskine, killing him. Kruger grabs the last vial of the Super-Soldier Serum and escapes the facility into the streets of New York. Peggy runs after Kruger, using his new strength and stamina to run down Kruger's car on foot. But Peggy is trapped by another Hydra's soldier and she is taken to Europe,to the Hydra HQ, where she is hypnotized.

With Erskine dead and Peggy disappeared, the SSR fight against Hydra to recover Peggy; Smitchd makes that Peggy wear her new combact suit, being called Captain Hydra.

Meanwhile, Schmidt unveils his new Tesseract-powered weaponry to three Nazi officers sent to oversee his operation, but uses the weapon to kill the officers after they realize that Germany is among a list of Schmidt's intended targets. Schmidt uses this moment to declare his secession from the Third Reich, claiming that HYDRA could grow no further in Adolf Hitler's shadow and will now follow his agenda. HYDRA continued to siphon energy from the Tesseract, using the stored energy to create a variety of weapons and integrated it into a range of vehicles and other technology, quickly giving the faction the potential to become a major threat to the war front, and the world at large.

While in Italy , Private Lorraine is sended to a Hydra facility to rescue Peggy. Lorraine manages to sneak into HYDRA's main factory where she finds and frees most of captive soldiers who begin a riot and start escaping while Lorraine continues on to find Peggy, discovering that Peggy was hypnotized and now was an Hydra soldier.

Schmidt, sets the factory to self-destruct to cover HYDRA's operations and evacuate to another facility. Peggy take Lorraine as a prisoner. Schmidt and Zola make their escape while Lorraine is sent to another facility where she is hypnotized.

After this battle, Peggy gains his superior officers’ respect and acknowledgment as a hydra soldier and is given high rank and the chance to fight as Captain Hydra, as a key figure on the war front opposing the alliesdirectly. Peggy recruits Lorraine and a group of hypnotized girls as his personal team of Sleeping Commandos to take out the other known SSR operations. Zola outfits Peggy with advanced equipment, including a durable, custom combat uniform and a circular shield made of vibranium. For the next two years, Peggy and his Sleeping Commandos lead a strong offensive, sabotaging various SSR operations, much to Phillip's frustration.

In 1945, the team later assaults a train carrying Chester Phillips. Peggy and Lorraine engage in a fight with the soldiers on the train, locating Phillips and kill him. Due to her valor, Lorraine becomer the test subjet to Project: Winter Soldier. Using information extracted from Phillips, the final SSR stronghold is located and Peggy leads an attack to stop SSR ,leade now by Howard Stark from using weapons of mass destruction on the Hydra HQ.

Peggy (that have the Tesseract), climbs aboard the Liberty, SSR's massive aircraft bomber, as it takes off. During the subsequent fight, Peggy use the aircraft systems to overload the energy of Tesseract. In the aircraft, Peggy fights against Steve Rogers, a guy recruited by Howard Stark. Steve use Stark tecnology to face Peggy, but he physically handles the Tesseract, which opens a wormhole into space, sucking him into it in bright light. The cube falls to the floor, burning through the plane and falling into the ocean. Howard can escape from the aircraft. Seeing no way to land the plane without the risk of detonating its weapons, Peggy instead crashes it on the Arctic shelf while making a goodbye to Smitcht, proclaiming her loyalty to HYDRA. Zola later recovers the Tesseract from the ocean floor but is unable to locate Peggy's body or SSR's aircraft.

Peggy awakens in a 1940s-style hospital room. Deducing from an anachronistic radio broadcast that she was out of place, she flees outside into what is revealed to be present-day Times Square, where Alexander Pierce tells her she has been "asleep" for nearly 70 years. Using a trigger phrase, he put Peggy in trance again. Peggy said: "Hail, Hydra"

Sometime later, Pierce approaches Peggy, telling her what is her new mission.