Roots: Planet of the Apes (the appearance of the alien).
Goofs: When the Draconian passes out during torture, his head falls back, revealing Miles Richardson's neck. When the Sontaran recognizes the human as female, he quotes Linx's description from 'The Time Warrior' - this is presumably intentional, but hugely annoying. See also Shakedown.
There are hints the mercenary is Ace at some point between Love and War and Deceit, but this is flatly contradicted by Mindgame Trilogy, in which she acts less like Ace and dies.
Dialogue Disasters: "You Sontaran scum"
Continuity: The Sontaran seen here is very similar to Linx, so he is probably a member of the Jingo Clan (see Lords of the Storm). The Sontaran recognizes the human female form, suggesting that he's had contact with humans previously. He announces that once the Sontarans have destroyed the Rutan, they will conquer the rest of the Galaxy, since any non-Sontaran race is inferior.
The Draconians have heard of the Sontaran-Rutan war, in tales of barbaric primitives fighting in the outer reaches of the Universe [actually the Milky Way galaxy]. The Draconian notes that Draconians and humans are acquainted, but hardly allies (Frontier in Space).
The aliens responsible for the experiment are a dark-skinned furred creature with horns, and are apparently from another dimension. They are planning to invade the Galaxy and are seeking a strong ally from within the Milky Way to aid them; the purpose of the experiment is to reveal with of the three species are the best warriors, so that they can offer them an alliance. The aliens create an asteroid in an inter-dimensional limbo, and manage to transmat the subjects their with an open ended beam, so they are technologically advanced. They destroy the asteroid once the experiment is declared a failure.
Links: Background on the Sontarans is virtually quoted verbatim from The Time Warrior. The legendary alien figure that the Draconian almost names is clearly meant to be the Doctor (see Frontier in Space, The Dark Path, and Catastrophea).
Location: An artificial asteroid in an inter-dimensional limbo, [given that humans and Draconians seem mutually distrusting but not actually hostile, this is presumably set shortly before or after Frontier in Space, which is set in 2540].
The Bottom Line: A short but sweet character drama that is clearly Doctor Who on the sly. The Sontaran and Draconian masks are very faithful to the original, which unfortunately was not the case in Shakedown. Shame the alien looks so goofy though...