November 1939, the Atlantic Ocean. German 'pocket battleship' the Admiral Graf Spee attacks and sinks a British merchant vessel, the Africa Shell. The Africa Shell's crew is brought aboard the Graf Spee. Captain Dove of the Africa Shell and Captain Langsdorff of the Graf Spee meet in Langsdorff's quarters. Langsdorff tells Dove that the Graf Spee is too fast to be caught by the British Navy. The Graf Spee docks with its supply ship and more captured British seamen are brought aboard. Three weeks later, the Graf Spee sinks another British vessel, the Doric Star. Her crew is also brought aboard. With Christmas approaching, Langsdorff gives his British captives some decorations.

Aboard the British cruiser HMS Ajax, Commodore Harwood meets Captain Bell of the HMS Exeter and Captain Parry of the HMNZS Achilles. Harwood says that, based on the distress signal sent by the Doric Star, he thinks the Graf Spee will be heading towards Uruguay and the three ships will have a chance of sinking her there. The captains agree.

A few days later, off the coast of Uruguay, the Ajax, Achilles and Exeter engage the Graf Spee in battle. The Exeter is heavily damaged and heads for the Falklands. The Graf Spee, also damaged, heads for Montevideo. Harwood decides to wait and ambush the Graf Spee when she leaves Montevideo. The Graf Spee becomes a fascination for locals, and crowds gather in Montevideo harbour. Among the crowd is Mike Fowler, an American journalist who is covering the story for American radio.

Langsdorff and Dr Langman, a German diplomat, meet the Uruguayan foreign minister, Dr Guani, who tells them that Uruguayan officials will assess the damage to the Graf Spee and decide how long she can stay moored in Montevideo. British diplomat Millington Drake reminds Guani that, under the Geneva Convention, neutral Uruguay must ask the Graf Spee to leave after 24 hours. Guani says that he will not be threatened. British intelligence officer Ray Martin and naval attaché Captain McCall set up a watch over the Graf Spee from the harbour. Langsdorff frees his British captives and gives Dove two Graf Spee hat ribbons as a souvenir.

Guani gives the Graf Spee until Sunday to leave Montevideo. Realising that this deadline does not allow much time to assemble a big enough fleet to guarantee sinking her, the British try to stall the Graf Spee's departure. Harwood is promoted to Rear-Admiral. The British fail in their attempt to delay the Graf Spee and on Sunday, after off-loading her crew onto a supply ship, she sets sail. Rather than attempting to evade the British, Langsdorff decides to scuttle his ship. Before reaching open sea and after a series of onboard explosions, the Graf Spee sinks. The crews of the two British ships celebrate. On board the supply ship, Dove and Langsdorff shake hands and wish each other good luck for the future.