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OFFICIAL SYNOPSIS from StarTrek.com
The crew of the U.S.S. Enterprise discovers an old style starship heading towards them shortly after a conference with a Ferengi vessel.
Much to Captain Picard's amazement, it is soon learned that the old ship, the U.S.S. Stargazer, is the vessel he abandoned nine years earlier in the famous battle of Maxia.
The Ferengi Captain, Bok, having since taken control of the U.S.S. Stargazer, informs Captain Picard that he is returning the vessel to Starfleet. Unknown to the Captain, a mind-altering device is also aboard the ship in his old belongings.
As it turns out, Bok is seeking revenge for the death of his son during the battle of Maxia, and the mysterious device he holds is used to inflict great pain on Picard. The Captain, his mind altered in terrifying ways, is forced to think about the horror of the Maxia battle. In an attempt to tarnish Picard's reputation, Bok also tampers with the Stargazer's records to make it appear as if the Captain fired on an innocent Ferengi vessel in the Maxia skirmish.
While Data, Riker and La Forge try to absolve the Captain, Wesley discovers patterns in Captain Picard's brain scan that match the low intensity transmissions being picked up by the Ferengi ship.
Although Commander Riker soon discovers the illegal, mind-altering device, the Captain has already beamed over to the U.S.S. Stargazer to relive the battle. This time, however, Picard thinks the enemy is the Enterprise. He ultimately tries to perform his famous "Picard Maneuver" with which he had won the battle of Maxia.
Before tragedy strikes, Data devises a strategy to seize the Stargazer with the Enterprise's tractor beam, thereby thwarting the supposedly unbeatable maneuver. In the meantime, the Captain, fighting the effects of the device, is convinced by Riker to use his phaser to destroy the mind-altering mechanism. By this time Bok has been taken into custody by his first officer, since the use of a mind-altering device violates Ferengi law.