Sometime during the early stages of World War II, miners at the town of Mittelburg in the Kyffhäuser Mountains discovered the hilt of the legendary sword that once belonged to the holy Emperor Frederick Barbarossa. Klaus Fischer, an aspiring scientist and researcher, used his connections in the Nazi party to contact the Ahenenerbe to the town of Mittelburg. Not long after, the Ahnenerbe arrived with the goal of obtaining the hilt and delivering it to Hitler's personal collection of artifacts.
When the Ahnenerbe was unable to remove the hilt from its resting place, they requested Doctor Peter Straub and his men's division, along with Heinz Richter, to come to the town to investigate, discovering the hilt is protected by a magnetic force. Upon arriving, Straub immediately had the Ahnenerbe put the town on lockdown.
Despite the hilt being protected by the magnetic force, Straub found a way to siphon a strange new energy from the hilt. During one of his early experiments, a cable drawing energy became overheated and snapped, striking two of Straub's Ahnenerbe guards and instantly killing them. However, the soldiers began to twitch violently twitch before getting up and stumbled towards Straub with the intentions of killing him. However, more Ahnenerbe guards arrived and put down the zombies. It was here that Straub soon realized the key to his research.
Dubbing this newfound energy "Geistkraft", Straub explained in one of his video recordings that the Geistkraft energy can be conducted through the human nervous system, activating the most primitive parts of the human cerebellum. This energy is what 'preserves' the undead, as well as drive them. Straub also discovers that by triggering the pain receptors of the corpses with the energy, he can augment the zombie's strength and speed. With this, he would be able to create an undead army, an army capable of tearing through the mightiest of steel and knock fortresses into nothing but dust. With this, he began to conduct experiments on villagers of the town, and possibly even some of his own men to begin to create his army.
Despite this however, the Nazis were still unable to obtain the hilt. This would be one of the starting points between the conflict between Straub and Richter, with the latter wanting to use the Geistkraft energy to create weaponry, one of which was the Tesla Gun and its variants. As the conflict between the two began to worsen, Klaus soon realized Straub's true motives and intentions. While trying to find a way to sabotage Straub's work, Klaus uncovered the true reason of why the legendary sword was taken apart in the first place through the art found within the main chamber. He also learned of a secret organization dedicated to keeping the sword's history a secret.
Unfortunately for him, Straub encountered his notes, and began to exploit the idea by looking into the stolen art pieces. Klaus also became aware of other forces who know of the sword's power. Finally, he took parts of Straub's research, including the Tesla Gun, and hid them all around Mittelburg, hoping that his sister Marie and the Allies would find them to battle against the horrors inflicted at Mittelburg. He then made recordings, summarizing all that has happened after Marie's departure, in hopes that she would find them later on.
Unfortunately for Klaus, he was compromised by Straub while attempting to sabotage Straub's ultimate weapon, the Panzermörder. As punishment for his crimes, Straub had Klaus fused with the Panzermörder. Unfortunately, the zombies finally broke free, plaging the town as both Straub and Richter went into hiding. Not long after, a MFAA team lead by Marie utilizes a train to reach Mittelburg. However, the Panzermörder intercepts the train and derails it, disabling it as Marie is seperated from the others. Marie then works her way through a farmhouse, battling the undead alone before regrouping with the others in Mittelburg.