This episode involves the conclusion of the Astate Encounter and its short-term consequences.
With the Galactic Empire having destroyed two of the Alliance’s fleets, Reinhard looks to destroy the 4th fleet next. Unfortunately for him, fate has a way on intervening.
Yang Wen-li’s commander Paeta, is injured as their ship takes on fire. Yang then takes on command of the fleet and immediately assures them that they can attain victory, despite the fact that he is not so sure himself. After a brief explanation on the impact of the Iserlohn Fortress on the direction of the war as a whole, we return to the battlefield.
The remainder of the battle becomes a tactical battle between Yang and Reinhard. Reinhard instructs his fleet to take on a spindle formation with the goal being to break through the center of Yang’s fleet. The maneuver is countered by Yang by retreating, then splitting allowing the fleet to get behind the Empire’s fleet. Eventually, the two fleets end up in a ring formation that both Yang and Reinhard realize will simply become a pointless exercise in attrition.
Effectively, the result of the battle is a draw. Yang can take comfort in the fact he stopped the bleeding even if the Alliance suffered 1.5 million deaths. Reinhard did much better than expected given the numerical disadvantage, he would rather have won, but is willing to take the draw.
The rest of the episode is devoted to reaction to the battle. Both sides claim famous victories to their own people. The Empire aristocracy is pleased to no end, while the focus on the Alliance puts the battle in perspective. Jean Robert Lap was one of the commanders who died in the first episode, and his fiance Jessica Edwards has to call the military to find out he was double promoted as a result. She meets up with Yang in the graveyard, she blames the war itself for Lap’s death more than anything Yang could have done.
Tangential Points: That is one massive graveyard, with it stretching all the way to the horizon…The musical direction was much improved from the first episode, mainly in that I didn’t really notice it more than I would expect…Is the Iserlohn Fortress anything more than the cliché one mega weapon superfortress that it appeared in its brief appearance?
Lower Mid-Table 
Since you bring it up, I don’t think it’s giving too much away to say that Iserlohn is not the only fortress of its size.
I ❤ Iserlohn. Trust me, it’s not all what you think. XD It’s more than just a Death Star copycat.
I was impressed with Yang turning things around for the Alliance relatively quickly and at least saving them from total annihilation.
One thing that has struck me about the battles is how cold and remote they feel. Maybe part of that is simply budget limitations, and maybe part of that is also a refusal to make the war into entertainment. The one moment that sticks in my mind is when that one Empire general is like, “Fuck this, I’m going out on my own” and his ship is blown away IMMEDIATELY, but it happens like it is no big deal. Damn, that’s cold.
These early episodes are really about establishing Yang’s talent on the battlefield. The no-name Imperial admirals are mostly like red shirts at this point. The deaths start having more meaning as the series moves on though as characters get properly introduced.