Trace is a scientist from Earth, not a warrior. As such, it is generally in his character to defend himself, but not to seek out violence — only knowledge. This theme is reiterated throughout the game as Trace not only struggles to understand the world he has been thrown into, but also struggles to deal with having to kill other living beings.
Prior to the events of the game, Trace is a theoretical physicist whose revolutionary theories are regarded by other scientists as false and insignificant, thereby earning him the nickname "Athetos," a word meaning "without place," "to do away with," or "to reject." Trace is blacklisted by many of his colleagues. Nonetheless, he continues striving to validate his work.
The story starts in the year 2005 in a New Mexico research facility where Trace and colleague Hammond are working on an experiment based on Trace's revolutionary ideas in the field of physics. The beamlet in the experiment goes awry with the pressure valve and a huge explosion occurs, severely injuring Trace and rendering him unconscious. This is the last memory of Earth Trace recalls before waking up in an alien world. Unbeknownst to Trace, he has been mysteriously transported to an egg-shaped device called a Rebirth Chamber through the intervention of sentient, towering machines called Rusalki, with his body seemingly intact and uninjured. When he comes to, Trace is implored telepathically by a female voice, who later introduces herself as the Rusalka Elsenova, to retrieve a gun called the Axiom Disruptor in the adjacent room. She also warns Trace to stay away from an ominous being called Athetos for the moment. In actuality, the Rusalki have cloned a much younger, kinder version of Athetos in hopes that this younger version could eventually locate and kill Athetos. Trace is the identity of this clone. The lab explosion never actually happened to this clone of Trace; the events of the explosion are merely a memory inherited from the memories of Athetos, the original Trace, although the cloned Trace is not aware of this.
As the game progresses, Trace is informed by Elsenova that he has ended up on an alien world called Sudra, and that a plague created by Athetos has wiped out or mutated most of the Sudrans on the planet. Trace is then told that defeating Athetos is the key to finding his way back to Earth, but he is first urged to locate and activate the Power Filter and the Remote Drones in order to repair the bodies of Elsenova and her fellow Rusalki Veruska and Ophelia. Throughout his explorations of Sudra, Trace encounters and kills several cybernetic monstrosities called Variants, which he later discovers are mutated clones of Athetos, and by extension, himself.
Eventually, Trace finds Athetos in a life support vat located in the atmosphere above Sudra, along with the Breach Attractor preventing Elsenova from approaching the atmosphere without killing her. During the ensuing battle, Trace momentarily disrupts the Breach Attractor, allowing Elsenova to rise to the upper atmosphere and destroy it entirely. After doing so, the Rusalki are once again free to move about above the planet, and Elsenova chooses to kill Athetos with a laser beam despite Trace's pleas not to. Afterward, Elsenova renders Trace unconscious and seemingly sends him back to Earth, during the aftermath of the lab explosion, unharmed and in perfect condition. However, the credits scene shows Trace lying unconscious on top of what appears to be the body of a Rusalka, suggesting that Elsenova had not actually sent Trace back to Earth; unbeknownst to Trace, Elsenova had the Rusalka Veruska create an algorithm for a dream Earth where Trace wakes up without injury and in perfect condition. Believing that he has returned to Earth, Trace devotes his time trying to learn more about Sudra, in hopes that he may find a way to return to it someday. Then one day, an unannounced guest arrives at Trace's lab, revealed to be Athetos, who shoots Trace with a gun, but not before telling him, "There's no use running from your own self. Time to wake up, Trace."
Since Athetos, the very first Trace, managed to reach Sudra without outside aid sometime during the 21st century, and it had been hundreds, if not thousands of years since Athetos first set foot on the planet, then this further supports the fact that Trace the player character had been put in a dream algorithm of Earth by Veruska, because he would not have had a recognizable real-world Earth to return to since many centuries had passed since his memory of the lab explosion.
"I think I'd better begin with the first time I died."
"I was at the end of my proverbial rope."
"Jobless. Carless. Homeless. I couldn't afford a plane ticket, so I took the train."
"Hopefully my parents would take pity on me."
"I'd screwed up. And I had no idea how to un-screw things up."
"Maybe it's just as well then, that things happened the way they did -"
"- An unexceptional life coming to an unexceptional end."
"But that's when things started to get interesting."
Note: When previewed, the Youtube commentator said the intro was pretentious, so it was reworked into the Z-machine New Mexico Physicist scenes shown in the final version.