Act I: Tony Stark (Robert Downey, Jr.) get kidnapped while in Afghanistan. He is badly injured. There is damage to his heart. The Ten Rings, the group holding him, orders him to build them weapons. They are already using weapons built by his company but they want something bigger and better. Instead he builds a device to keep himself from dying and then builds an armored suit to help him escape.
Act II: Back from Afghanistan Tony starts working on a much improved version of the suit he built while in captivity. The original was left behind in his rush to escape. After completing the suit he flies back to Afghanistan and does his best to take down the Ten Rings. Unfortunately he sustains some damage and is unable to complete the job.
Act III: Obadiah Stane (Jeff Bridges), his business partner of sorts, gets his hands on the original suit and makes some serious improvements to it. Stane is the one who was selling arms to the Ten Rings. Eventually there is a showdown between Tony and Stane.
There are a number of characters that I didn't mention in the 3 act description above, the most important of them are Pepper Potts (Gwyneth Paltrow) and Phil Coulson (Clark Gregg). Both play pivotal roles in third act.
I saw this movie in the theater when it was first released. This may be the first time I've watched it in its entirety since then. It totally holds up. I have no complaints about plot holes. It isn't perfect but it works for me.
