S.H.I.E.L.D. detected an alien ship heading towards earth, and sent Thor to deal with it. Thor found a powerful alien in it, and was defeated when he became the human Donald Blake again. The ship crashed on Earth and SHIELD surrounded it. Seeking Thor's hammer to use it in his defense, the alien found just a stick, and knocked the wall in anger with it... and got the power of Thor, and the stick became Mjölnir again. But after defeating SHIELD Odin had an urgent need of Thor, and teleported him to Asgard... not realizing, in the rush, that the guy with Thor's hammer and costume was not actually Thor. Beta Ray Bill was imprisoned and Donald Blake was turned to Thor and taken to Asgard, and things were clarified: Beta Ray Bill is the protector of his people, and confused Thor and Odin with the demons that were chasing him.
But there's a problem: for the first time, someone other than Thor has been worthy enough to lift the hammer, and he claims that he won it in battle. They tried to settle it in a fight to the death: Beta Ray Bill won, defeated Thor, but did not kill him. So Odin tried another approach: he made a new hammer, Stormbreaker, specifically for Beta Ray Bill. Both of them and Lady Sif returned to the ship, and destroyed the demons. Before leaving, Odin moved one enchantment from Mjolnir to Stormbreaker: Bill was now capable of turning into his normal self, that he had lost after so many modifications to turn him into a super soldier. And, on the other hand, Thor lost the power to become Donald Blake.
The Ballad of Beta Ray Bill provides examples of:
- Aliens Speaking English: Skuttlebutt automatically decodified Thor's language and loaded it into Beta Ray Bill.
- Animated Adaptation: An episode of The Avengers: Earth's Mightiest Heroes!, with the same name, made an adaption of this story. S.H.I.E.L.D. was removed (and all planet Earth, for that matter), Thor does not have a Donald Blake identity in that series, there was no death match for the hammer or negotiation with the dwarves and they moved directly to forge a new one (hey, it has to be told in nearly 20 minutes!), and incorporated the Enchantress as a slave of Surtur, a subplot absent in the original work.
- Batman Gambit: The dwarves would not make a new hammer for free: the Asgardians had to send a godness to fight against their champion, and if he won, he would keep her as a love slave. But this request was not for the reasons you suspect: Eitri knew that Sif would win, and by doing so their champion (who was actually a bully) would be so ashamed that he wouldn't bother the dwarves anymore.
- Be Careful What You Wish For: Inverted. Thor began the story longing to be a mere human, at least for one day... and, at the end of the story, he lost his human identity.
- Bitch in Sheep's Clothing: Lorelei, helping a Troll being chased by hunters... and captured him, and gloated it to the hunters.
- Conservation of Ninjutsu: Lady Sif, a woman with a sword, against an endless wave of demons. Who wins?
- Didn't Think This Through: Thor was once an arrogant jerk. Odin had once turned him into a mere mortal, who could turn into Thor with an enchantment in the hammer. The idea was to make Thor appreciate patience and helping the weaklings. The enchantment was that "Whoever holds this hammer, if he's worthy, shall possess the power of Thor". It seems that Odin was also an arrogant jerk: he had never considered the chance that someone else other than Thor may be worthy.
- Duel to the Death: Thor and Beta Ray Bill fought in a wasteland for Mjolnir. They both fell unconscious over a piece of rock, in a river of lava, heading to a fall. Beta Ray Bill woke up first: he just had to jump to security and win. But he broke the rules, and jumped to security with Thor. He won the fight, but nobody died.
- Glory Seeker: Lady Sif can not stand the easy life, and wants battles and adventures.
- Also for Agnar, who wants to kill Balder simply to check if he's a better warrior or not.
- I Just Want to Be Normal: It began with Donald Blake in the park, thinking about this.
- Odin and Sif realize that Beta Ray Bill no longer looks like his fellow aliens because of the enhancements made to turn him into a soldier capable of defending his entire civilization, leading to him feeling isolated from them. Odin transfers Mjolnir's enchantment to Stormbreaker, allowing Bill to turn into a normal looking alien by tapping Stormbreaker on the ground.
- Improvised Weapon: Neither Thor or Beta Ray Bill could use Mjolnir during the duel. Thor began to throw rocks as a replacement.
- Laughably Evil: Loki will help Lorelei seduce Thor, simply because it would be fun.
- Lethal Lava Land: Where the Thor-Bill fight takes place. Thor correctly guesses that Odin chose this wasteland precisely because it was similar to Bill's native planet, giving him a slight advantage over Thor.
- One Steve Limit: The new character was meant to be named "Beta Ray Jones", but Walt Simonson changed his mind: there are too many "Jones" guys in the Marvel Universe.
- Paper-Thin Disguise: Odin, "disguised" to visit the dwarves. He was immediately recognized.
- Super Soldier: Beta Ray Bill was improved as such by his race.
- This Is Unforgivable!: Volstagg told Agnar that if he killed Balder, he may eventually forgive him, because he has also been young and arrogant once. Thor and Fandral may also forgive him, they have also been young and arrogant. But... what about Hogun the Grim? He has never been young. He will never forget... nor forgive!
- Wowing Cthulhu: Beta Ray Bill was the first character other than Odin and Thor himself to lift Mjolnir.