Brian (Baldwin) and Donald Rimgale (De Niro) use clues snatched from Swayzak's office to piece together what has been going on. They enter his house to find him unconscious, with a burst gas pipe in the room and an electrical point damaged. Suddenly they are attacked by a masked intruder. He hits Donald on the head, and then while fighting with Brian he burns his back on the exposed electricals before he knocks him out and escapes.
Rimgale wakes in time, and carries Brian and then Swayzak to safety just as the place explodes - he is sent flying and is impaled on a metal fence. The ambulance crews show, and Rimgale is taken to hospital. In the ward he asks Brian to talk to Ronald Bartel, the arsonist behind bars, to find out who is the murderer.
Ronald (Donald Sutherland) gets under Brian's skin, but tells him that the man he is looking for knows a lot about fire - and hates it. Brian pieces it together that they are looking for a fireman. The name of a chemical jumps out at him.
He races over to Stephen's boat - and finds the chemical listed on the empty fuel cans. Stephen shows. Brian is unconvinced, and heads to the station. He breaks into his brother's locker to hunt for clues - but in the shower room he sees Axe in a towel -- with a burn mark of the electrical point on his shoulder. Axe sees him - and knows that something is up.
Stephen races to the station - outside he finds Brian. He tells them that he knows it is Axe - he gave him the cans. Just then the alarms ring, he promises to handle it. As he leaves, Brian spies Axe in an upstairs window - he has heard everything, and now Stephen is in danger too. He grabs a coat and helmet and jumps into the next engine.
Both engines drive at speed to attack a fire at a large chemical factory, but Brian's truck hits a car and crashes onto its side. Brian scrambles out and sprints to the building - but his brother's unit are already inside. He climbs the ladder and finds his brother arguing with Axe. There is an explosion and they are separated. Brian and Stephen are going to get out when Axe shows and knocks out Brian.
Stephen and Axe face off with, well, axes. Axe, the human, changes his expression from anger to remorse. More explosions rock the building and their platform almost collapses. Stephen reaches out a hand to catch Axe. Axe is on fire. Stephen can't hold on for much longer and falls -- he hits another platform while axe falls into the flames.
Brian jumps to his side. Two other firefighters are in the building, but lose control of their hose. He bravely jumps to the ground and takes control, and protects the others while they get his brother to safety. Finally, Stephen is proud of his brother, the fireman.
Outside Brian goes with Stephen in the ambulance. Things don't look too good. He asks his little brother not to tell the board that it was Axe, as that would damage the department. His heart stops and the team try to revive him.
It cuts to the Chicago city streets where the emergency crews form a funeral parade to pay their respects to Stephen and Axe as their coffins are led through the city.
After the service Brian and Rimsgale interrupt a press conference by Swayzak, and throw the dossier of evidence linking his budget cuts to fraud to the journalists.
Later, Brian has rejoined his brother's unit, and answers a call. On the truck he tightens the overcoat of a nervous probie, while he remains as calm as his brother once was.