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Carlos Oliveira receives a phone call from his squad leader, Mitch Hirami ordering him to attend a U.B.C.S. office briefing (their headquarters being a renovated warehouse) over their next assignment. It is learned there that all four platoons (120 men) of the U.B.C.S. is to be sent out to Raccoon City. While attending the briefing, Carlos notices a strange man watching him from a distance. They're told that a chemical spill has made the citizens act irrationally, and they are to assist any civilians, but little else. In reality, they are sent in to test trained military soldiers against the zombies and the B.O.W.s while Umbrella collects combat data on their performance.

On the late afternoon of September 28, Jill Valentine starts her attempt to escape the doomed Raccoon City after her efforts to save dwindled survivors. She thinks back over her last effort, where survivors she'd found stayed at the local school. When she returned, Zombies had broken in. Overcome with grief and guilt, she resolves to leave the city once and for all, in hopes of finally taking Umbrella down. As she thinks back, it is revealed that three days prior, the attacks on the citizens grew worse. Casualties mounted and her efforts to persuade the RPD to believe her accusations that Umbrella was guilty, and that the zombies were no longer human, ended in failure. The city was quarantined by the military, and all means of communication were blocked. Within the city, the police formed blockades. Both professional and crudely built, in an effort to corral the zombies, as well as control the rioting that became prevalent.

The UBCS mercenaries stand no chance against the Zombie hordes as many are wiped out quickly. Nicholai Ginovaef, one of Umbrellas "Watchdog Supervisors" attempts to assassinate his commanding officer, Lt. Mikhail Victor, out of jealousy for his surviving so long.

Carlos Oliveira meets Trent, the rebel Umbrella employee who was watching him earlier, who provides him with information prior to his arrival to Raccoon City, and is told to head to a local restaurant if he runs into trouble. Carlos and a fellow soldier, Randy Thomas, who was bitten by a zombie, barely escape the attack on their squad. Carlos radios for anyone in the city to help him. Unbeknownst to him, Jill hears the transmission in the RPD. Carlos is then forced to kill Randy, who has turned into a zombie. Carlos later finds and befriends Jill, who is on the run from the "pursuer".

Meanwhile, Jill meets Brad Vickers, the S.T.A.R.S. Alpha Team pilot who stranded her and the rest of Alpha team on their first mission. Surprised that he is in town, and still alive, he reveals that someone is coming for them, and runs off. Jill's dread slowly grows at his vague warning, but ignores it for the time being. To help in her escape, she travels to the RPD in hopes of finding ammo and supplies. Brad finds Jill as she is about to enter, and is then quickly killed by the Nemesis. Frightened, Jill escapes into the RPD and looks for something to help against the new threat. As she searches, she finds a Blue Gem, her old lockpicks, and a Magnum. While there, she hears Carlos' transmission, though it is badly distorted. As she is leaving, the Nemesis makes another appearance, and she barely escapes.

Carlos makes it to the restaurant Trent spoke of. Trent tells Carlos that if he opens the gate to City Hall, everything will become clearer, even warning him to be careful whom he trusts. He is told that two gems are needed to open the gate. Carlos laments over how long it may take to find the second one as he'd already found the first one when he and Randy took shelter, unaware that Jill has the other.

Not long after the call, Carlos and Jill meet, shortly after that, Nemesis appears and Jill incapacitates it in an explosion. Jill initially doesn't trust Carlos as he works for Umbrella, but they work together to escape the city in time, as well as evade the Nemesis. Carlos keeps his meeting with Trent a secret from Jill (who also had a meeting with him in the first novel). They discover a small book on a dead mercenary, vaguely hinting at Nicholai being involved with something, They discover that the cable car is a good way to escape the city, as it goes to the clock tower. It is also revealed that when the bells are rung, a helicopter will come, but the cable car is in disrepair and needs spare parts.

Jill and Carlos become closer as they search for the parts, Jill explains her part in the S.T.A.R.S. and about Umbrella's clandestine activities, of which Carlos was unaware. Carlos, now trusting Jill, reveals his meeting with Trent, and she reveals her meeting with him as well. The cable car is finally repaired, as Carlos, Jill, and a wounded Mikhail try and escape. Nemesis tracks Jill once more, and breaks into the car. Mikhail sacrifices himself to save Jill by using a grenade against the Nemesis.

The two arrive at the clock tower, and proceed to ring the bells. Nemesis appears yet again, and shoots down the helicopter.

Jill is confronted by the Nemesis and is infected with the t-Virus when one of its tentacles pierces her shoulder. After a brief battle with it, Jill realizes she's infected, and slips into a deep sleep. Carlos takes care of Jill, and Jill wakes briefly to tell him that she's infected, and that if she's worse, she wishes for Carlos to kill her. Carlos then swears to find her a cure. As Carlos searches the Hospital for a T-vaccine, another Watchdog is killed, this time Ken Franklin. Carlos manages to find Nicholai, who is in possession of the T-vaccine. After a failed attempt at killing Carlos, Carlos takes the vaccine back to Jill before the hospital is destroyed by C-4 bombs planted by Nicholai.

Jill is cured, and wakes up on the night of October 1, and proceeds to leave on her own to find a way to escape the city, while Carlos is recovering, eventually traveling through the park, to the Dead Factory.

The story ends with Nemesis being defeated, while Carlos acquires a Helicopter and escapes with Jill moments before Raccoon City is destroyed by a missile.