The Defector: A Romulan cross the Neutral Zone, claiming he's defecting.
Data appears to be doing Shakespeare on the holodeck. Why does one of the holocharacters look like Picard? That's kinda weird. Picard himself complements him on his acting. Suddenly Riker alerts them to the fact a ship is heading through the Neutral Zone. It's a Romulan scout ship - the pilot requests asylum, and is being pursued by a Warbird.
The scout ship, badly damaged, ends up in Federation space, and the Enterprise extends shields around it. The Warbird sods off while Picard is still giving his "please leave" speech. After they beam the Romulan, Setal, and his immense shoulder pads on board, he claims that the Romulans are planning to retake the Neutral zone in violation of the treaty, and that the Enterprise needs to destroy a Romulan base being set up there. While they're discussing what to do, the scout ship explodes - Setal set the autodestruct prior to leaving the ship because, as he tells Riker, he's no traitor and knew they'd want to strip the ship of its technology. Worf is veeeeery hostile towards Setal, who fortunately has a profound knowledge of Klingon curses. Come prepared.
After Riker shows Setal to some quarters, he has a drink of water and pulls something out of his boot. EXCITING!
Picard receives a message from Star Fleet telling him to nip along the side of the Neutral Zone to nearest where the base is supposed to be. Meanwhile, the others have worked out that the Warbird was being very careful not to destroy Setal's ship. How suspicious. Picard instructs Data to send in a class one probe to monitor Nelvana III.
Riker and Troi question Setal. Is that a Holodeck replication of a Romulan base? Why bother? Hell, why bother erecting a set for one scene? Or did they just reuse the Romulan bridge set? Data chats to Geordi, who thinks that Setal is honest. The probe, indeed, picks up faint radio transmissions which are too weak to decode.
Data chats with Setal in Ten Forward, and says the replicators can't do Romulan Ale because they'd need the chemical makeup of the stuff, and they have limited knowledge of the Romulan Empire. Didn't they have Romulan Ale in one of the TOS movies? Data takes him to the holodeck and replicates the Valley of Chula (where the spaceship from The Empty Child/The Doctor Dances came from, evidently), whereupon Setal reveals he's actually Admiral Jarok. Star Fleet confirms his identity. What's this "limited knowledge" of which Data speaks?
Picard confronts Jarok, who says he had babies and decided that peace was the right way. He promises to turn over technical and tactical data, so Picard sets course for Nelvana III.
Once they get into orbit, they start scanning, but can't detect anything. Jarok is surprised that there's no base there. Picard suggests that he's been tricked to test his loyalty to the Romulans. They turn the ship around, and are promptly confronted by two Warbirds. Tomalak suggests that they surrender and gives them 30 seconds to decide.
Picard smirks, and signals the pack of Klingon battlecruisers to decloak. PWNED! The Romulans scarper.
Jarok is very depressed, and commits suicide.