A simulated war game suddenly turns into a real-life fight for survival when the crew is ambushed by a Ferengi battleship. As part of the first Starfleet Battle Simulation program, Picard and Riker are tapped to compete against each other in a mock battle. Picard is given command of the U.S.S. Enterprise, while Riker is assigned the Hathaway, a hopelessly unequipped, 80-year-old vessel which he's given 48 hours to outfit for battle. Acting as an observer of the exercise is Kolrami, a master strategist from the Zakdorn race, which is reputed to have the greatest strategic minds in the galaxy. When Riker and his team beam aboard the Hathaway, they are shocked by its dilapidated condition. It quickly becomes obvious that the outclassed ship's only hope for victory lies in outwitting the U.S.S. Enterprise crew. Meanwhile, Dr. Pulaski challenges the arrogant Kolrami to play Data in the highly complex game of Strategema. Although Pulaski is certain that the android's skills will prove superior to the Zakdorn's, Kolrami wins.
