As Zsasz is slipping back into his cell, Batman and Nightwing are having an unexpected rendezvous in the Asylum's air ducts. Oddly enough however Batman isn't trying to escape from the Asylum at all. He explains to Nightwing that after it became clear that Zsasz was behind the murders he began to suspect that perhaps Dr. Arkham may be complicit in Zsasz's crime spree. As such he had Commissioner Gordon aid him in faking Lt. Kitch's death in order to get Batman remanded into Arkham's custody. The two break into Dr. Arkham's office to look for any information that would incriminate Zsasz and/or Dr. Arkham himself. While rifling through Arkham's files, Batman comes across the file for Everard Mallitt but before he can investigate further, Nightwing's enquiry into Arkham's notes on contractor Zolly Hiram sets off an alarm. While Nightwing escapes back through the ventilation shafts, Bruce stays behind to fend off any guards who may arrive.

At home dreaming of a peaceful future in which a nightmarish rogue like Batman no longer haunts the lives of his reformed patients, Dr. Arkham is awakened by the sound of his alarm system. He rushes to the hospital where he has his guards place Batman into a "therapy room." During his transfer back to his solitary tube confinement, Zsasz convinces Dr. Arkham that if he were to defeat Batman it might lead to some breakthroughs for the patients Dr. Arkham wants so badly to cure.

In an attempt to do so, Dr. Arkham pits Batman against a man whose botched partial lobotomy left him a nearly unstoppable ball of strength and rage. Though Batman is able to subdue the patient, Dr. Arkham is unsatisfied with the results so he moves onto the next stage - unleashing nearly all of the inmates in Arkham Asylum on Batman!