We are introduced to Dr. Horrible who tells us through musical numbers about his plan for world domination, his arch nemesis; Captain Hammer and his long-time crush on the girl from the laundromat; Penny. Penny also happens to be falling for Captain Hammer after he 'saves her life.'
Dr. Horrible still tries desperately to get Penny's attention, but unfortunately she seems to be smitten with Captain Hammer. Meanwhile Captain Hammer's true nature begins to reveal itself, he might not be as into doing good for the right reasons but more for selfish ones. Dr. Horrible decides that he's going to get rid of Hammer once and for all.
With America in a Captain Hammer frenzy Dr. Horrible invents a 'death ray' which he plans to use on the superhero at the unveiling of the new Captain Hammer statue. Penny is torn between the hero and the villain, realizing that she may have feelings for Horrible. The stand-off between Hammer and Horrible ends in an ultimately tragic event for the doctor. Horrible becomes a worldwide phenomenon.