John André, still a prisoner of war stationed in Pennsylvania, becomes the beneficiary of a prisoner exchange. He is sent to New York City, now held by the British. Instead of returning home to Britain like many of his colleagues, André decides to stay and settle a score with the Americans. 

André sends British commander William Howe maps and charts of the Pennsylvania terrain which he made, and Howe in turn promises him an advantageous position in his army. In the spring, André is assigned to the staff of General Charles Grey, a position much to his liking. 

Arnold basks in glory and admiration in the wake of the Battle of Valcour. At a fancy party in Boston he meets local beauty Betsy DeBlois and begins to court her. At the same time, Arnold starts to receive some less positive feedback about his exploits, both from other generals and from a Congress wary of military celebrities. When General Washington submits a request for new generals—recommending Arnold for one of the slots—Congress ignores all his suggestions. Arnold takes his as a personal insult and a backhanded way of requesting his resignation. He surmises that slanderous rumors spread about him by his enemies influenced Congress' decision.