With Scully and Mulder separated, Mulder is assigned a new partner, Alex Krycek and together they try to crack a case involving Vietnam heroes who don't seem to be getting enough sleep.

As Dr. Saul Grissom lies on his couch in his appartement, suddenly he sees flames creeping under the door and his whole place sets on fire so he quickly calls 911. When the fire brigade arrive they find him dead on the floor but the room around shows no sign that a fire actually took place.

Mulder is called on to the case and is given a tape of the 911 call to work with. He is puzzled that another agent has been assigned onto the case and his new partner quickly identifies himself as Alex Krycek. The pair start working on the case together and later Krycek tells Mulder that he has always followed Mulder's work as he "believed there was more out there than they were telling us".

After an investigation on her own, Scully manages to find out that Dr. Grissom ran a sleep-disorder clinic and her autopsy shows that his internal organs were damaged. Scully concludes that Grissom must have somehow believed he was being burned which caused him to be killed. Meanwhile, a Marine special forces officer is murdered by what he thinks he was seeing, in this case Vietnamese peasants that gun him down as Augustus Cole watches the murder. The agents also find that the latest victim was stationed at the exact same spot where Dr.Grissom worked 24 years earlier.

They find that the lone survivor of that unit is now Augustus Cole so Krycek and Mulder go to the VA hospital where he is but the doctor finds that he is missing much to his disbelief. After a tip off, Mulder meets with the mysterious informant that identified himself in The Host, Mr. X who tells Mulder about a secret project that involved creating the perfect soldier by depriving them of sleep. What happened was the project created a race of super soldiers but they lost control when the soldiers started murdering everyone. It seems Augustus Cole who hasn't had a wink of sleep in 24 years due to a part removed from his brain, is looking for revenge.

Mulder realizes that Cole must possess a psychic ability that enables him to create images in other people's minds that are so real that the victims believe they really are being killed. He also concludes that Cole must now be wanting to murder the doctor that did it to him so he and his new partner go down to the train station where he is at. As Cole watches over, Mulder sees what he believes to be the doctor and Cole with a gun so Mulder fires and thinks he is shot. Krycek runs up to him and tells him that the doctor never showed and that Mulder wasn't shot. Meanwhile, the real doctor is killed by an army of dead Vietnam soldiers.

Mulder manages to find Cole about to commit suicide holding a bible in his hand. Just after Mulder asks him to testify against what the army did to him, Krycek shoots him claiming that he had a gun in his hand. It seems that Cole made Mulder think it was really a bible. Later, Mulder and Scully meet. He tells Scully about his meeting with X. She replies "Do you trust him?" but Mulder cannot give her an answer.

Meanwhile, Krycek is speaking at a secret meeting with the Cancer Man. He informs the Cancer Man that Mulder has "found another source" and that "Scully is a much larger problem than you described". The Cancer Man calmy replies as he stubs out his cigarette, "Every problem has a solution."