|For other uses, see Phase Two (disambiguation)|
In response to the events in New Mexico and the fact of an inevitable extraterrestial threat, the World Security Council scrapped the Avengers Initiative in favor of a more practical approach - the development of weapons powered by the Tesseract. S.H.I.E.L.D. relaunched the Project P.E.G.A.S.U.S. and brought Erik Selvig to work on re-igniting the Tesseract at the Joint Dark Energy Mission Facility, under Nick Fury's supervision.
In an early success for Phase 2, S.H.I.E.L.D. scientists were able to retro-fit the Destroyer into the Destroyer Armor Prototype Gun. Afterwards, S.H.I.E.L.D. seized numerous HYDRA's Tesseract-powered weapons, such as the Arnimhilation 99L Assault Weapon and stored at the Helicarrier for further research. However, after the Destruction of Project P.E.G.A.S.U.S., the Battle of New York, and the removal of the Tesseract from Earth, Phase 2 was effectively ended.