The brief engagement known as the Skirmish on Nalyd unfolded during Darth Wredd's insurgency, a rebellion waged against both the One Sith and the Galactic Federation Triumvirate. After experiencing a vision foretelling the assassination of the Galactic Empress Marasiah Fel by the renegade Sith Darth Wredd, the Imperial Knight Jao Assam and the junk dealer Ania Solo commenced a pursuit to locate Wredd. They uncovered evidence directing them to Nalyd, the native world of Wredd's subordinate Dieben, who was awaiting execution for his numerous offenses. Seeking information about Wredd's location, Jao and Ania abducted Dieben from the execution arena. Dieben perished during their escape without revealing any details about Wredd. However, Jao and Ania subsequently learned from Nalydian officials that Dieben had influential connections within the Calamari system. Consequently, Jao and Ania journeyed to Dac, where they discovered that another rogue Sith, Darth Luft, and his pirate accomplices were exploiting enslaved Mon Calamari and Quarren refugees to construct a pirate armada.
Having experienced a vision depicting the assault on the Galactic Empress Marasiah Fel by the renegade Sith Darth Wredd, Imperial Knight Jao Assam deserted his post and began a search for Darth Wredd. He was joined by junk dealer Ania Solo, whom he had met during the Carreras Incident. While reviewing incident reports and criminal records on a seized shuttle, Ania discovered a file on Dieben, Wredd's former Nalydian associate whom she had encountered at Wredd's base on the floating world of Mala. Jao and Ania quickly found out that Dieben's escape pod had been recovered by law enforcement. Because he was wanted for multiple crimes on his home planet of Nalyd, Dieben was extradited there, a world shrouded in swirling orange fog.
Upon arriving on Nalyd, Jao and Ania soon discovered that Dieben had been condemned to death by local authorities for various offenses, including the assassination of a Minister, assaulting a law enforcement officer, and sabotaging public transportation, resulting in ten deaths. Dieben was to be executed by a firing squad in a public arena as punishment. Ania and Jao tried to secure a delay in the execution so they could question Dieben. When that failed, Ania took control of a spider–like creature and "rescued" Dieben just before the soldiers could shoot him. She then escaped the arena on the spider mount and raced down a steep cliff. The Nalydian authorities pursued Ania and opened fire on her.
Dieben did not appreciate being rescued and fought with Ania. Meanwhile, Jao managed to grab a tendril of a jellyfish–like creature and followed Ania. The Nalydian authorities quickly caught up with Ania and fired on her spider mount, wounding it and causing Ania and Dieben to fall in mid-air. However, Jao and his jellyfish mount rescued them. Jao scolded Ania for her recklessness. However, Dieben then bit Ania, causing all three of them to lose their grip on the jellyfish creature and fall into a swamp. Jao and Ania were lucky to land in a muddy estuary, but Dieben was impaled by a spiky plant, resulting in fatal injuries.
Before Dieben's death, Ania tried to ask him if he had planned to meet with Darth Wredd before Imperial authorities captured him. However, Dieben refused to reveal any information. Jao and Ania were then surrounded by the Nalydian authorities. The first rider they encountered praised them for "doing their job for them," while the second remarked that Jao and Ania would not be taking Dieben back to Dac now. The Nalydian authorities attempted to arrest Jao and Ania for interfering with their legal process. However, Ania managed to defuse the situation by pointing out that Jao was an Imperial Knight skilled in the arts of lightsaber combat. She convinced them that it was more convenient for them to reach an agreement. In the end, Jao and Ania agreed to return Dieben's body in exchange for information that Dieben had planned to meet with some "powerful friends" in the lawless Calamari system.
Ultimately, Jao and Ania's mission to Nalyd succeeded in obtaining information about Darth Wredd's apparent location. However, the rogue Sith had intentionally planted a false lead to guide Jao and Ania to the Calamari system. There, another rogue Sith named Darth Luft and his pirate associates had seized control of the Mon Calamari Orbital Shipyards and were using enslaved Mon Calamari and Quarren refugees to build a pirate fleet. Jao and Ania managed to kill Darth Luft and bring the lawless system to the attention of the Galactic Federation Triumvirate. The Triumvirate authorities liberated the slaves and apprehended the pirates. However, Jao later learned that Darth Wredd had intended for him to kill Darth Luft in order to fulfill his plan to destroy the One Sith and reinstate the Rule of Two.