HYDRA is a terrorist-military organization bent on world domination. It was founded shortly after the rise of Nazism in Germany by Johann Schmidt as the scientific branch of the Nazi Schutzstaffel. Its main purpose was to create advanced weaponry for the German armies, but over the years, members of HYDRA became loyal only to Schmidt himself. In 1943, Schmidt separated HYDRA from Nazi Germany to start his own conquest of the world.
HYDRA was organized by Johann Schmidt after becoming the Red Skull. It was the Nazi-German Military's deep science division. It was named after the mythological creature and had used its original phrase: "cut off one head, two more will take its place". Their main purpose was to create advanced weapons for the Nazis. They stormed a castle in Norway where the mystical object known as the Tesseract was hidden for hundreds of years. They used its power to create advanced technology weapons and tanks (its power could create laser ammunitions).
After discovering such power they separated from the Nazi-German army and created their own Super-Army to rule over the world. HYDRA had many bases around Europe but the US army sent the SSR team with Captain America and the Howling Commandos to destroy the HYDRA factories. Then, after the Red Skull presumably died, HYDRA was dissolved and its advanced technology was studied by Stark Industries.
Though HYDRA had long since been disbanded, their weapons and technology still existed. What was left was kept by S.H.I.E.L.D. for their program "Phase 2," which involved reactivating the HYDRA weapons with the Tesseract for use against super-powered or other-worldly forces. Steve Rogers discovered several cases of HYDRA weapons aboard the S.H.I.E.L.D. Helicarrier and exposed this phase to Nick Fury and the other Avengers. After the Battle of New York, and the removal of the Tesseract from Earth, Phase 2 was effectively ended.
Rogers also mentioned during a meeting that Bruce Banner should study Loki's Staff while hunting for the Tesseract, as it functioned similarly to HYDRA's weapons.
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