It takes place after Infamous 2 evil ending, Zeke is shown to be alive and he tells Cole that military is after him and they must to stop Beast 2 from devouring New York what is actually the place of the game.
When Awesome Duo finds safe place, some Werewolves who are mutated people of NYC and revealed to be one of the enemies. After defeating them, Cole realizes of his actions and what he have done.
Meanwhile, military plots to destroy Cole and Kuo. Cat from Festival of Blood returns and she battles Mutants of NYC, but one of them consumes Cat and transform her into the Behemoth. Then, Cole must defeat Cat.
After this Militia returns and joins forces with military to kill Cole, and so they capture Kuo and Cat and put into slave outfits and hipnotize them as slaves. Zeke then trains some Mutants and makes Rebel Alliance.
Cole, Zeke and the Rebel Alliance go to the Military/Militia hideout. They use helicopters to track down Militia and remain only Military, Mutants and Beast 2. Pretty not much, huh?