Islamist factions, rapidly falling under the more radical influence of Zawahiri and his rich Saudi acolyte Osama bin Laden, join the Neo-Conservative-influenced Reagan Administration to combat the Soviet Union's invasion of Afghanistan. They are successful in repulsing the Soviet armies and, when the Eastern Bloc begins to collapse in the late 1980s, both groups believe they were the primary architect of the "Evil Empire's" defeat and thus have the power to carry out their revolutions in their homelands. Curtis instead argues that the Soviets were on their last legs and were doomed to collapse without intervention.

Curtis argues that, after their failed revolutions, bin Laden and Zawahiri had little or no popular support, let alone a serious complex organisation of terrorists, and were dependent upon independent operatives to carry out their new call for jihad. The film instead shows the United States government wanting to prosecute bin Laden in absentia for the 1998 U.S. embassy bombings, and needing to prove him to be the head of a criminal organisation to do so. They find a former associate of bin Laden, Jamal al-Fadl, and pay him to testify that bin Laden was the head of a massive terrorist organisation called "al-Qaeda". With the September 11th attacks, Neo-Conservatives in the new Republican government of George W. Bush use this created concept of an organisation to justify another crusade against a new evil enemy, leading to the launch of the War on Terrorism.

In the past our politicians offered us dreams of a better world. Now they promise to protect us from nightmares. The most frightening of these is the threat of an international terror network. But just as the dreams were not true, neither are these nightmares. The first part of the series explains the origins of Islamism and Neo-Conservatism.