May 1968. Captain Dmitri "Demi" Zubov (Ed Harris) is a veteran Soviet Navy captain finishing up a career that failed to live up to the legacy of his legendary father. He is given an assignment by Admiral Markov (Lance Henriksen) to lead a mission and given the command of an old boat (Demi commanded this boat during the early part of his career). This submarine is at the end of its service life and was scheduled to be transferred over to the Chinese after a last voyage. Demi argues that his crew just came back from a 76-day cruise (they are expecting a 3 month furlough and have been in the docks for only 3 weeks), but Markov over-rules him and sends him on the mission. Due to mistakes, he made during his service, involving the deaths of six of his past crew in a collision and fire, this will be his last assignment and his only opportunity to command any ship at all. Markov positions this assignment as a send-off honor to Demi from the Soviet Navy.Demi interrupts a party involving his crew, including Alex Kozlov (William Fichtner), his up-and-coming executive officer headed for great success. Demi leaves his home to lead Alex and his crew on the voyage. Bruni (David Duchovny) & his team of technical experts have joined the crew to test a prototype equipment mounted at the front of the submarine. The orders for the boat and locked in the safe, as per protocol. Demi tells Alex that he is in line to command a nuclear sub. Markov commits suicide at his office window while watching the submarine depart. Right out of dock, Demi can hear loud banging noises inside the sub, but full search on the exterior of the sub, reveals nothing. the clangs continue. Alex finds that Bruni and his men have no records in Soviet navy other than rank and number. They might be KGB radicals & commandos. Pavlov (Johnathon Schaech) is the political officer on boat.The boat is soon being tracked by US attack sub, and Demi takes steps to shake it off their tail. Alex & Demi open the first set of orders that command them to go to specific area of the ocean and test the prototype mounted on their sub. However soon into the voyage, Bruni begin to alter the objectives of the mission (He demands the boat to be put under a merchant ship), causing Demi and Kozlov to become concerned. Bruni forces Demi to take the sub to within 5 meters of the merchant ship, even though it is too close to the screws and the battery on the sub is within 10 mins of going dead.Demi and Kozlov are wary of Bruni and his men and soon discover his mission: to use a device known as the Phantom to alter their ship's acoustic signature to make them appear to be a civilian merchant vessel, or a number of other ships. After a demonstration (where Bruni forces Demi to surface and engage diesel, allowing an American sub to track them, and then engages the phantom to cloak their signature), Demi questions Bruni about the device and the mission's objectives. Demi wants to send a message to the fleet to check if Bruni is authorized for these tests, but Pavlov doesn't agree with the implication that Bruni may be a rouge element of the KGB.Demi orders to surface the boat to confirm their orders. Bruni's men hold Demi at gunpoint. Bruni tells the crew that Demi is a drunk and an epileptic and unfit for command. He had the lowest scores out of Sub command school and bribed his way to command of the boats. He was also inept and was responsible for the loss of 6 lives, and 36 injured. After being confined, Demi tells his men that there was a fire on his boat in the torpedo section. The men fighting it wouldn't come out, so he was forced to seal the section and open the tubes to let the sea water in, to douse the fire. Demi explains how he began to suffer from seizures and brain trauma after suffering a concussion from his sub's fateful collision with Markov's sub. He also says that a boat goes rogue only to defect or to start a war, and he thinks Bruni is starting a war. Bruni tells Alex to disable the ballistic nuclear warhead.Demi, Kozlov and the loyal crew plot and execute a plan that eventually takes back the ship and alerts another Russian submarine that they are in distress. Demi and his men manage to fashion a transmitter to announce their location and to transmit that they are a rogue boat. Almost instantly a Soviet sub starts moving towards them at high speeds.Bruni reveals to Demi (when they are being attacked by the K-123 nuclear Soviet sub, and Bruni asks Demi to pilot the boat and rescue the situation) that he and his comrades are rogue operatives and not here under orders from the Soviet government. He explains that the United States military has started a secret program called "Dark Star" (a weapon that detonates an EMP in the ionosphere making all subs and air launched weapons useless, while all land based missiles will be taken out in their silos before they can be fueled) that will make the United States invulnerable to the Soviet Union's nuclear weapons, and he and his fellow operatives fear for the safety of their homeland if its nuclear capabilities are rendered useless.Demi manages to shake off the K-123's torpedoes, hide in the Thermocline and then launch an attack to disable the K-123 and force it to surface. Their plan is to start a nuclear war between the United States and China by disguising the ship as a Chinese vessel and launching a nuclear missile at the American Pacific Fleet off Midway. This will engage US and China in war, while Soviets emerge as the real victors. Demi and Bruni fight for control of the boat, but Bruni manages to launch the missile while the disabled Soviet sub fires 2 torpedoes towards them.Two other members of the crew, Tyrtov (Sean Patrick Flanery) and Sasha (Jason Gray-Stanford), attempt to disable the missile. They succeeded in disabling the warhead, even though the missile was fired. Eventually, fighting ensues on-board, resulting in the deaths of many of both Demi's crew and Bruni's men. The submarine is soon badly damaged by Soviet torpedoes and sinks to the ocean floor. The crew begin breathing in poisonous chlorine gas fumes produced by the mixture of seawater and battery acid, as Alex is sent on a rescue attempt for the remaining crew. Bruni explains to Demi that he was on board when the fire took place and that he was the man ordered by Demi to trap the men, leading to their demise. Demi orders Alex to escape the boat in the rescue pod, that could fit only a few men.Eventually, the submarine is recovered and the remaining crew, including Demi and his men, are seen standing atop the ship. From the nearby dock, Demi's wife and daughter praise his actions while Alex, now a captain, salutes the sub, paying respects to his former commanding officer. It is then revealed that Demi and his men, watching from the submarine's deck, are ghosts, watching from the afterlife. The Americans recovered the intact warhead from the bottom of the ocean.