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"The Fall of the DHARMA Initiative" is one of the few theories which explain most of the mysteries of Lost. It explains the history of the Others, explains the Incident alternatively and also explains the Season 3 trailers of Lost where Jack clearly says "Who will I be?" in a sneaky tone and in the other promo Jack is standing leaning on something and he seems to be angry in a treacherous sort of way.

DHARMA Initiative vs. The Hanso Foundation

This theory states that the Hanso Foundation and the DHARMA Initiative (one of its departments) worked co-operatively during the Cold War to make world peace more of a possibility. It sought to remove nuclear weapons from the military agenda. They built stations on an island in the pacific ocean between Soviet Russia and the United States and constructed a stealth-shield around it, (which was destroyed at the end of "Live Together, Die Alone") This shield kept their work hidden from the US and Russia, the main super-powers. They researched in the stations and tried to manufacture defenses against nuclear weapons, they studied electro-magnetism to see if they could repel nuclear missiles away from a country, zoology to research on animals to see if any had adapted to surviving nuclear gas and if humans could learn from this, as a longshot way to survive it, and monitored subjects to see how they would react to tense situations, such as having to press a button every 108 minutes, so they could work out ways to deal with evacuation plans etc. This was the experiment and world peace was their goal. Moreover, as Dr. Marvin Candle said: "Not long after the experiments began however, there was an incident." This is where the Fall of DHARMA theory gets its name.

A few decades into the experiment the DHARMA Initiative had wasted millions of funds from the Hanso Foundation and had millions more to waste. The Hanso employees were not too worried about world peace. They were there to keep an eye on the DHARMA Initiative for the Hanso Foundation. Soon, greed took over; Hanso Employees gathered and raided the armouries and headed for the treasury. They held dozens of DHARMA peace-seekers at gun-point and what was meant to be a bloodless hand over of cash suddenly became a massacre as the DHARMA employees fought back, the overwhelming forces of the Hanso Foundation rushed in and destroyed the DHARMA Initiative. Using their security-system (black smoke) and their UN-like military they combed the jungles and killed all DHARMA workers and ruined their experiments. The surviving members of the DHARMA Initiative grouped up - they are the Others as we know them today. Radzinsky may have been one of them, the surviving DHARMA members knew that certain things had to be done to keep the world in existence so they sent people to make sure the button continued to be pushed, Dr. Marvin Candle/Mark Wickman may have recorded the orientation films at this time to ensure that the button continued to be pushed in future.

The Security System was the main means of finding the remaining DHARMA employees from then on. The money-hungry Hanso Employees could easily have said that the DHARMA Initiative had "rebelled" against them and that they were forced to kill the rebels. The Black Smoke(s) (possibly) was the main tool for finding them after this.

The Plane Crash

So the DHARMA remnants (the Others) kept their heads down for years, sixteen to be precise, Danielle and her team were the last group of Hanso soldiers. The Others, using their knowledge from previous DHARMA experiments, invented the Sickness and the vaccine (to use on themselves and those who they thought needed protection, such as Claire) with the intentions of wiping out Danielle's team, which it nearly did successfully. All of a sudden a plane crashes on the Island, the survivors don't know anything about where they are or why they're there. The Pilot however may have worked for the DHARMA Initiative and knew of the rebellion. He drove the plane to the Island and Kelvin led Desmond miles away from the Hatch so that the button could not be pushed in time and so that the plane was pulled towards the Island. This was intercepted by the black smoke which smashed the plane to pieces and later recognized the Pilot as a DHARMA worker and killed him. The Hanso Foundation reversed DHARMA's Plan so that the survivors would draw out the Others from hiding so that the Hanso Foundation could finish them off. The Others would obviously think that this was a trap and that they were Hanso Employees. Therefore, they kidnapped some to see who they were. The Others fell for the bait but have done their best to keep their heads down.

Pros

• Explains the Others in a way that fits in and explains their history and complies with established canon.
• Explains the two promos which indicate a treacherous Jack.
• Explains the Black Smoke and its purpose.
• Explains why DHARMA Initiative built stations all over the Island with different purposes and scientific areas.
• "This is Our Island. And the only reason you're living on it, is because we LET you live on it." Tom was talking in the past tense - after all, at that point the Others still thought that the survivors of flight 815 were Hanso Foundation Employees. They let the Hanso Foundation on to the Island; they trusted those decades ago, and now they are still paying for it.
  • "...we LET you live on it" is grammatically sound in present tense too. Also The Others have made lists and collected information about everyone, so they knew all along that they weren't DHARMA folk.
• Explains Ben's claim to be "Good Guys" and in an interview JJ Abrams said that the survivors of flight 815 wont think of the Others as much of a threat in the third season. Perhaps they will be more threatened by the Hanso Foundation.
• The Others walking stealthily, when Jin and Eko see them walking past, they seem to be tip-toeing through the jungle.
  • Counter-theory: If Jin and Eko could see them by chance, could they really have survived for long with the Hanso Foundation hunting them? If the Hanso Foundation are not hunting them anymore, why are they still so stealthy?
    • No, the Hanso Soldiers are not around as much any more (To go easy on the budget). The Black Smoke (possibly Black Smokes) is what is worrying the Others. As mentioned above.
• Explains why flight 815 crashed.
• Desmond referring to Hostiles. He meant the Hanso Foundation and not everyone's assumption of the Others.
• The state of the Others' way of life, it seems forced upon them; their secrecy, stealth etc.
• The Black Smoke's keen-ness to kill the Pilot in Episode 1.
  • Counter-theory: Why then it kills Eko, not being a DHARMA employee?
    • It could be that it Killed him because he pushed the button, which was a DHARMA responsibility, so perhaps it mistook him for a DHARMA employee.
• Complies with the movie of the young Alvar Hanso talking about nuclear weapons and devising a way to counter them.
• Explains the Sickness and some of the vaccine mystery.
• Explains Danielle's hate of the Others.
  • Counter-theory: If Danielle came as a soldier for the Hanso foundation, why did she come with her daughter? (or is it her daughter at all?)
    • Her Daughter may have been born on the Island.
      • Which then begs the question: why send a pregnant soldier?
• Explains near enough everything.
• In Season 3, Mikhail Bunin talks about the hostilities and the fall of DHARMA.
  • But what he said contradicts this theory.

Cons

• Orientation videos are copyrighted by the Hanso Foundation
• DHARMA kept millions of dollars on the Island? Quite Doubtful. In addition, THF funded the DI -- why would they need to take money when they could just stop providing it? Perhaps this more likely scenario could be worked into the theory -- in an attempt to "take control" THF withholds funding, DHARMA falls, THF makes use of the Island facilities for their own purposes.
  • However, it's possible the money DHARMA kept on the island is the money Ben can pay Miles.
• Fails to consider Island's "healing powers" (Locke's Legs, Rose's Cancer).
• Fails to consider why the Others are obsessed with taking children.
• Fails to consider importance of Walt and his seemingly psychic powers.
• Fails to consider the food drops.
  • Counter theory: If the Others have been maintaining the appearance of the existence of the DHARMA initiative, then they would obviously be able to maintain the food drops.
• Fails to consider Yemi's plane.
• Fails to consider the 'coincidental' connections between characters prior to the crash.
• Fails to consider Jacob.
• We know that DHARMA employee's were gassed and not shot. However, the "Hostiles" may not be who they appear to be (actually working for the Hanso foundation?)
• Fails to explain why the others think of themselves(or purport to) as The Good Guys.
• Fails to explain the origin of the Island's "unique magnetic properties"
• This was obviously written before "The Man Behind The Curtain," which established that the Others were on the island long before Dharma.

Alternatives

The fall of the DHARMA Initiative

The DHARMA Initiative was sent to the Island to run experiments with the aim of changing one or more of the constants of the Valenzetti Equation. If one of the constants could be change even slightly, it would show a way through science to save the world from the destruction promised by the equation.

The experiments at the electromagnetic research facility involved the containment or harnessing of unique magnetic properties in the Island. The containment of the magnetic anomaly developed a leak and began to increase in charge until it presented a danger to the entire island (if not the world). This was called the incident. During or after the incident, a way was discovered to manually discharge the magnetic anomaly. The parameters necessary to discharge the anomaly were the same as the parameters of the Valenzetti Equation. Because the Initiative intended to change the parameters of the Equation, it was necessary to have an operator present to enter the parameters by hand in case they ever changed. The anomaly was not destroyed because of its unique scientific value.

The initiative created the Cerberus system to guard their facilities from the hostiles.

The Island was isolated from normal communication with the outside world. A radio tower existed that recalculated and broadcast out the Numbers on a regular basis. Any change in the broadcast would be taken as a sign that the initiative had been successful and the equation changed.

Hanso and the Hanso Foundation had different motives than the initiative for being on the Island. They had to do with information about the Island gained from Magnus Hanso when he arrived on the Island on the Black Rock.

There was an incident between Hanso and someone named MDG in the 1980s. This is mentioned on the Blast Door. But the nature of the incident is not known. The Cerberus system seems to have catastrophically malfunctioned at the same time.

The pre-initiative population of the Island (the Others or the hostiles) interacted with the DHARMA Initiative teams on the Island. Around 1994, relations with the hostiles broke down. There was a conflict known as the Purge. Purge indicates that either members of the initiative staff were collaborating with the hostiles or that the hostiles were working in some way with the initiative.

The hostiles had some way of co-opting or taking over the bodies of a certain number of people. This is what happened to members of the French team that arrived years later on the Island. Rather than a sickness, they were either possessed or physically became Others/hostiles.

At the time of the conflict, the Swan was sealed and the teams stationed there were heavily armed. Special arrangements had previously been made for supply of the Swan by air and the total isolation of the swan from the population of the Island.

The DHARMA Initiative staff also prepared the Flame for demolition in the event of the hostiles attempting to take it over.

The initiative lost the conflict and all members on the Island were killed. The hostiles took over all the facilities of the DHARMA Initiative including the Barracks, the submarine resupply system and the Flame. At the Flame, they co-opted a man hired by the Initiative who arrived on the Island after the war was over to continue to run the Flame and to pretend that the initiative was still functioning. All the research projects were ended and the DHARMA facilities were turned over to other purposes.

The hostiles knew of the existence of the Swan but did not understand its importance or that their lives depended on it. As relief teams arrived, the Others captured them and made them part of their organization rather than sending them to the Swan.

The hostiles continued to use the support system of the initiative in the outside world to recruit people into serving their purposes on the Island. The security measures in effect on the Island prevented anyone on the outside from realizing that the initiative no longer existed.

The hostiles are incapable of having children or something to do with their ongoing activities on the Island makes it impossible for them to have children. They replenish their numbers by taking in children who arrive on the Island and by recruiting people from the outside world.

There are different types of Others. There are the hostiles, there are DHARMA Initiative personnel who joined and then there are people who came in from the outside.