The film begins with the main character Ivan Yermakov (Alexei Chadov) being interviewed, and as he begins his story the films cuts to the spring of 2000, during the Second Chechen War and after the fall of Grozny. A Chechen warlord Aslan Gugayev (Giorgi Gurgulia) runs a camp next to an aul in the Chechen highlands. Despite having secure income from his organized crime gangs in Moscow, Saint Peterburg and Samara as well as some legitimate business there, he takes joy in kidnapping, since that is more patriotic and militant than random crime. Both Ivan and his comrade Fedka were enslaved after they were taken prisoners in early 2000. They also had held captive with a Russian-Jewish businessman named Semyon from Vladikavkaz, who was being held for ransom.
They are later joined by a two theatre actors Englishman John Boyle (Ian Kelly) and his fiancée Margaret (Ingeborga Dapkūnaitė). They were kidnapped in Georgia during their tour there performing Shakespeare's Hamlet who John played. Ivan, having pre-draft experience with computers, knew a little English that allows him to as a translator for John; while also being entrusted by Aslan to utilize the Internet for communication. The five shared shocking living conditions in a pit, and every once in a while the Chechens would show how far they would go to get their way, through actions like publicly beheading two Russian servicemen and severing Semyon's finger one by one for ransom delays.
After a while of living in this ordeal, Semyon is dragged away (presumably killed) and the four are relocated to an even more remote base where their quarters are now a pit which is already occupied by a crippled Russian Captain Medvedev (Sergei Bodrov, Jr.) (no hint of relation or association to the current Russian Prime Minister, as it is a typically generic surname), and although the captain is paralyzed by an injury, his mere presence is enough to raise everyone's spirit, in particular Margaret's and Ivan's. John's negotiations with England to secure the 2 million pound sterling ransom goes nowhere and Aslan becomes fed up, deciding to secure his the money by releasing John, along with Ivan and Petka (since the two have no practical value for him), and keeping Margaret with an ultimatum of two months to get £2 million - otherwise, she is to be raped and beheaded.
Both Ivan and Petya are discharged from the Army and Ivan visits Medvedev's family in Saint Petersburg before going returning to his home city of Tobolsk. John's "rescue" gains him prominence back home in London, but his attempts to secure any help from the British authorities fail, as none wish to pay ransom to terrorists. Realising that he has to sell everything off, he is approached by a Channel 4 representative who offers him £200,000 in return for concise documentary footage of his travels. Accepting the offer, John rushes to Moscow after managing to collect (not specified, if the money paid by Channel 4 is included) around £400,000; however, all Russian authorities refuse to undertake the exchange as, again, none negotiate with terrorists . The farthest John gets is an offer to purchase a telephone number of an ex-KGB operative who lives in Vladikavkaz and specialises in ransom exchanges.
John next travels to Tobolsk, to find Ivan there and hire him as his translator. Back home, Ivan finds that few positive changes have occurred during his two-year absence: his parents have separated, some of his friends were killed in local gang wars, and the prospects of building a career are as dim as ever, even more for a (clearly traumatized) veteran like himself. However, what got him to follow John was not the prospect of what was left of the £35 thousand John had with him, but out of his respect for the Captain and his family.
Stocking up at an army surplus store the pair head off to Vladikavkaz, but the promised ex-KGB operative turns out to be nothing but a common crook. Desperate, Ivan decides to go and find Aslan alone and do the exchange by himself. Luckily he bumps into a soldier who is about to leave for Chechnya. Both he and John are smuggled in a truck, under a tarpaulin past the checkpoints, in exchange for Ivan's (personally-bought, high-quality, non-standard issue) combat boots.
Once there, the two first ambush and commandeer a Land Rover, stocked with arms and driven by Chechen terrorists. In the ensuring firefight Ivan kills all four terrorists, but inside the jeep a woman is also killed. The reality of this catches up with John and emotionally he nearly breaks down that war was not what he came to witness, Ivan in turn is angry because all the time he has helped him and in return John was not able to kill anyone in the ambush, putting their own lives in danger. Ivan points out, that this is John's war, and that the latter came out of his own free will.
The next morning however John pulls himself together and the pair come across a lone Chechen shepherd Ruslan Shamayev (Evklid Kyurdzidis) on a bus stop. Ivan beats him up and falsely leads him to believe that his unit will kill all his family should he not regularly report in. In return Ruslan promises to lead them to Gugayev. The path requires the three to ditch the Jeep and walk across a glacier, and through ridges that were deserted since the 1944 deportation.
The initial hostility and distrust dies down, as Ruslan fully cooperates and when approaching Aslan's camp (which is located right next to the Georgian border) tells Ivan of the standing clanal blood feud between the Shamayevs and Gugayevs. He promises to help Ivan out of his good will, in return for his aid in enrolling his son into Moscow's University. By the time they reach their destination Ivan trusts Ruslan with firearms.
The three then assault the camp, where despite Aslan's oath to Allah that neither Margaret nor the Captain will be hurt, John discovers Margaret naked and bruised, with obvious signs of rape. Enraged, he chases after Aslan and guns him down with a pistol. Ruslan then cuts Aslan's ear off. Aslan's death was never intended, as Ivan hoped to use him in negotiating a safe passage and then paying him off with what money they had left in return.
Soon enough the Chechen fighters start assaulting the camp, and Captain Medvedev suggests that they escape via the river by raft. After travelling part of the distance that way, the five then carry the immobile captain to a Chechen Tower and hold off the siege before the called in (via Aslan's satellite phone) Mi-24 and Mi-8 flight of helicopter gunships relieve and rescue the group.
Back at the airbase Ivan gets all of the £35 thousand he was promised, hands some to Ruslan, and his narrative picks up again, that John having shot the documentary became very famous. Whilst Ivan received charges of murder of citizens of the Russian Federation, as he was already discharged from military, John walked off free. He never visited Russia since and gave his witness statement in England. However, the proud Ruslan Shamayev came to Moscow and expressed how he was savagely beaten by Ivan, who cynically killed Chechen women and children; he now lives in Moscow, and his son is a student at Moscow State University. Margaret, following the experience and her obvious love for the Captain, never married John. Ivan sent all he had left to the Captain's family, which allowed them to finance several expensive operations. Only the Captain supports Ivan's statement, and once again Ivan repeats his respect for the man.
At that, everything fits in, as Ivan's interview was in a prison interrogation chamber; he himself thinks he will not be convicted, though anything can happen.
