Oh, for Christ's sake, DaSilva! Come off this cop on the beat mentality!   

                              Your wife left you for it!

The movie revolves around two NYPD Police Detectives, Det. Sgt. Deke DaSilva (Sly) and Det. Sgt. Matthew Fox who work undercover, and a terrorist Reinhardt Heymar Wulfgar. In the prologue, a man with a knife tries to mug a woman, who turns out to be DaSilva in a blonde wig.

The next scene takes place in London, where Wulfgar blows up a store. Meanwhile, back in New York, DaSilva and Fox go on a drug bust. Back in London again, Wulfgar meets an associate at a party, Kenneth, who tells Wulfgar that Mercer, who we never see but come to know as the financier of Wulfgar's operations, is withholding money owed to Wulfgar because several children were killed in Wulfgar's latest bombing. Wulfgar quickly finds out that Kenneth has tipped off the police and kills him and the policeman are coming to get him. He then flees to Paris where he meets his associate Shakka Holland at La Sainte Chapelle. Shakka remarks that La Sainte Chapelle is a bad meeting place because it's next to a courthouse in Paris. Shakka informs Wulfgar that Kenneth had a photo of Wulfgar on him when he was killed so Wulfgar and Shakka go to see a plastic surgeon. We find out later they killed the surgeon after the surgery. Wulfgar then flees to New York.

British counter terrorist specialist Peter Hartman comes to America to assemble a task force called A.T.A.C. (Anti-terrorist Action Command) to stop Wulfgar. Hartman believes Wulfgar will come to the U.S. next primarily for the press coverage. Hartman schools DaSilva, Fox and a specially selected team of New York police on Wulfgar, Shakka, and terrorism in general.

Wulfgar meets a woman, Pam, in a nightclub and moves in with her. Surprisingly enough, when she asks him what he does for a living, he tells her the complete and total truth: "I'm an international terrorist wanted on three continents." She thinks he's just kidding. Alone in her apartment while Wulfgar (known as Eric to Pam), is away, Pam discovers Wulfgar's arsenal of weapons in a case just as Wulfgar unexpectedly comes home. Pam, who has a stereo blaring, doesn't hear him and is caught holding a grenade from his suitcase. Wulfgar kills Pam but her death is the first break Hartman, DaSilva, and Fox get. Wulfgar has left behind a map with his last bombing circled. DaSilva and Fox find out some of Pam's favorite nightspots and hope to find Wulfgar at one of them. They do. But, unsure of what he looks like since the plastic surgery, they hesitate and after a long chase, Wulfgar gets away. Wulfgar is now hiding and living down in the basement of a little grocery store and after the chase, we learn Shakka is now in the US and is there to meet him.

A few days later the team is protecting an important UN function that has the earmarks of a potential terrorist target. Just when everything seems to be running smoothly we see that Shakka is there, she has somehow eluded security, and with no one else around, she shoots Hartman.

Wulfgar and Shakka's next act is to hijack the Roosevelt Island Tram carrying UN representatives. Because he now knows DaSilva as a result of the nightclub chase he executes the wife of the French ambassador while DaSilva is watching from a hovering Police helicopter. Wulfgar decides to let a baby onboard go and demands that DaSilva personally board the tramway to rescue it. DaSilva is winched up to the aerial and confronts Wulfgar face-to-face. DaSilva demands to know why Wulfgar killed the woman. “I wanted to.” the sadist replies. DaSilva and the baby are lowered back down to a waiting barge.

The Police agree to Wulfgar's demands for a bus to escort him to safety. Wulfgar and Shakka hide among the crowd of hostages from the tram. DaSilva waits until they try to board before making his move. He plays back a recording of Hartman's lecture in which the terrorist expert denounces Shakka. In a rage, Shakka breaks from the hostages and is gunned down by Fox. Wulfgar somehow escapes, driving the bus off a ramp into the East River.

A search of the wreckage shows no sign of Wulfgar. The team finds the store where Wulfgar has been staying and DaSilva finds that Wulfgar has a lot of information on DaSilva, including an address of his ex-wife, Irene. Wulfgar makes his way to Irene's house, hides outside, and sees Irene walk up to the house and go in. He breaks in, finds her washing dishes and sneaks up behind her brandishing a knife. But DaSilva has made it to Irene's first, he turns around, wearing his ex-wife's housecoat and a blonde wig, brandishing a gun. With nowhere to go, Wulfgar lunges at DaSilva who fires his revolver twice into the terrorist, blowing him into the street.

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