Dr. Horrible is an aspiring super-villain with a plan for world domination. He also has a crush on Penny, a girl he met at the laundromat. There, he accidentally makes her meet his arch nemesis Captain Hammer whom she falls in love with.
Penny seems to be smitten with Captain Hammer who's true nature begins to reveal itself: He might not be as into doing good for the right reasons but more for selfish ones. Dr. Horrible decides that he must get rid of Captain Hammer.
Dr. Horrible invents a death ray which he plans to use on the superhero at the unveiling of a new Captain Hammer statue. Penny is torn between the hero and the villain, realizing that she may have feelings for Horrible.