Just rewatched this amazing episode last night for the first time in years.
Such an awesome episode. The Enterprise-C appears from a wormhole, but belongs 22 years in the past. They emerge from it in tatters, with a fraction of the crew left alive and their ship in pieces after defending a Klingon Outpost from a Romulan Attack of 4 Romulan ships.
Meanwhile, reality around the Enterprise-D (Picard's ship) changes. Suddenly they are in different uniforms, the Enterprise is a battleship, and Lt. Tasha Yar is alive and at her post!
It's revealed that Starfleet are on the the losing side of a war against the Klingon Empire. And that the battle that the Enterprise-C just arrived from in the past, was a deciding factor in Starfleet and The Klingon Empire signing a peace-treaty. The Klingons were honored by the Enterprise-C's sacrifice in battle.
So now Picard and crew must decide to send a ship and her crew back to certain death to avoid a costly war, or to save the lives of them and their crew. To futher complicate the matter, according to the Prime Directive, they can't even send them back with modern weaponry to help them.
Science fiction was soooo good back then. Now, it seems, it's just in-your-face action with a sci-fi back-drop. Wish we still got good sci-fi like this, nowadays.