Commander Honor Harrington is given command of HMS Fearless , a light cruiser with its armament gutted, to prove Admiral Hemphill's theories in the coming war game exercises. She uses surprise to do well in her first exercise battle, but once everyone knows about her armament, she gets hammered in future exercises, much to the fury of the Admiral. So she is posted to Basilisk Station, a remote, unimportant outpost, as 'punishment' --- and the crew are very unhappy about it.
Basilisk Station is commanded by Lord Pavel Young, an old enemy of Honor's from the time at the Academy when he had tried to rape her, and she had beaten him to a pulp in return. He sees his chance for revenge, and takes his own ship back to Manticore for 'repairs', leaving her dreadfully understaffed, and with a crew with rock-bottom morale, to patrol the whole Station.
But Honor manages to perform each of her duties, in particular, customs inspections --- which reveal an enormous amount of smuggling. This makes her many high placed enemies, the most noticeable of whom is Klaus Hauptman. He tries to pressure her into stopping 'harassing' his merchant fleet. When she refuses, he plays his trump card: he threatens her parents. But she responds by threatening to kill him in a duel if he harms them. He goes away, defeated, but a sworn enemy.
All this is a prelude to a covert operation by the Peeps to foment a native rebellion on the planet Medusa, so that they can take the Basilisk wormhole junction, prior to invading Manticore itself. But because Honor has been parolling Basilisk properly, she realises what is going on, and manages to stop the invasion. Because of her gutted armament, however, the battle virtually destroys her ship in the process.
Honor is promoted to Captain, and decorated with the Manticore Cross.