Good Dalek Incident

The Good Dalek Incident was the Time Lord designation for the event in which the Twelfth Doctor met Rusty, a Dalek who defected to the Combined Galactic Resistance. (TV: Into the Dalek, PROSE: Dalek Combat Training Manual)

A day to come
Through the extrapolations of the Matrix, the Time War-era Time Lords foresaw the encounter with Rusty in the Doctor's personal future, which was recorded in the Dalek Combat Training Manual. They were fascinated by the concept that a Dalek could be "conditioned" to turn against its own kind. Though the Dalek's new mentality was created via a radiation-shielding malfunction, the fact that the Doctor was able to have an immediate effect by making direct mental contact indicated the possibility that other such Daleks could be created, which was investigated by the psi division. (PROSE: Dalek Combat Training Manual)

Dating
The Dalek Combat Training Manual composed by the Time Lords, which dated other events down to the century, could not identify the specific temporal co-ordinates of Rusty's incident. (PROSE: Dalek Combat Training Manual) According to the research of human historians, Rusty fought towards the end of the Dalek Wars. (PROSE:  The Astounding Untold History of the Greatest Enemies of the Universe) Alternatively, 21st century alientologist Justin Richards stated in his book The Secret Lives of Monsters that the events surrounding the Aristotle occurred at "the height" of the Dalek Wars. (PROSE: The Secret Lives of Monsters) Another historical account however held that the Combined Galactic Resistance against whom Rusty fought had operated during the Great War. (PROSE: The Whoniverse)

However, Rusty also had access to memories of post-Last Great Time War events, suggesting he was from a later point in Dalek history. (TV: Into the Dalek) Indeed, Time Lord research placed Rusty's existence after the War. In fact, the Lords of Time stated the Dalek unit existed at some point after the Siege of Trenzalore, (PROSE: Dalek Combat Training Manual) which the human historians had tentatively dubbed the destruction of the Dalek species. (PROSE:  The Astounding Untold History of the Greatest Enemies of the Universe)

A Good Dalek
Rusty was a standard Dalek drone until one battle left him drifting alone in the depths of space; unknown to him, his power source had cracked and was leaking radiation that disrupted his shell's programming to keep him from feeling anything but xenophobic hatred towards non-Daleks. Seeing the birth of a star triggered a realisation in Rusty of the inevitability of life returning despite the efforts of the Daleks. From this, Rusty saw Daleks were evil and needed to be wiped from existence.

Eventually, he was found by the Combined Galactic Resistance, and brought aboard their ship the Aristotle (TV: Into the Dalek) in the Ryzak solar system. (PROSE: The Secret Lives of Monsters) They attempted to open the shell, hurting Rusty. Badly hurt already, Rusty asked for help in recovering so he could exterminate his own race. Interested in the idea of a moral Dalek, the crew promised him medical attention.

The Doctor, Clara Oswald, Journey Blue, Ross and Gretchen Carlisle were shrunk and ventured into Rusty to try to fix the damage that was killing him. Using his sonic screwdriver, the Doctor repaired a crack in Rusty's power source that was leaking radiation and killing him.

However, without the radiation affecting him, Rusty reverted to his original Dalek programming, restored to full power and went on a rampage, killing several soldiers and sending a distress call that attracted a nearby Dalek flying saucer. Upon urging from Clara, the Doctor decided to attempt to restore the changes once more. He had Clara reactivate the Dalek's suppressed memories so he could see the birth of the star again and be reminded of the universe's beauty.

Clara succeeded and the Doctor telepathically linked with Rusty to show him more from inside his own mind. At first it seemed the Doctor had succeeded, as Rusty again saw beauty and divinity. However, Rusty also saw the Doctor's hatred of the Daleks, which resonated even more strongly with him. Rusty saw the Daleks as an evil which must be, in true Dalek fashion, exterminated.

Rusty then went on a rampage against his own kind, slaughtering the Daleks attacking the Aristotle and fooling the saucer into retreating by falsely telling the other Daleks that the Aristotle's self-destruct had been activated. Rusty left with the Daleks to continue his efforts against them, telling the Doctor that although Rusty himself was not a "good Dalek", the Doctor was a good Dalek. (TV: Into the Dalek)

Aftermath
According to human historians, Rusty's betrayal sent the Supreme Council in a world of worry, but their experiments proved that his freak turn of heart could not be mass-replicated. Relieved, and unwilling to snuff out such beautiful hatred as Rusty's, they consigned him to the Dalek Asylum, home to Daleks whose hatred was so powerful it threatened their own kind in one way or another. Soon after, the Daleks completed their time machine which was used to pursue the Doctor's first incarnation through time. (PROSE:  The Astounding Untold History of the Greatest Enemies of the Universe) The asylum was ultimately destroyed by the Parliament of the Daleks. (TV: Asylum of the Daleks) Alternatively, the Time Lords believed Rusty to be from a later point in Dalek history, dating his crusade against the Daleks beginning sometime after the asylum's destruction. (PROSE: Dalek Combat Training Manual)

Rusty continued to fight the Daleks for billions of years. In time, he grew to be, as the Twelfth Doctor put it, "a bit of a legend", entirely because he was a Dalek who had turned on his own kind. As his casing grew ancient and, much like his nickname implied it should be, rusty, (PROSE: Twice Upon a Time) he isolated himself at the centre of the universe on Villengard, combating numerous Daleks that came to kill him. Rusty fended them off, positioning himself in a tower overlooking the battered city, (TV: Twice Upon a Time) specifically remaining in what may have once been a throne room. Hooked up to machines to appeared to be keeping the Dalek alive, Rusty would fire out the windows at the many Daleks who came to destroy him, destroying their casings and filling the ruins with a mess of broken travel machines. (PROSE: Twice Upon a Time)

The Twelfth Doctor, nearing his death, came to the lone Dalek with his original incarnation to gain information on the Testimony, as Rusty still had access to the Daleks' Pathweb. Rusty attacked him but, upon the Doctor noting the Dalek had a chance to watch him die, eventually removed his Gunstick as a peace offering to the Doctor. (TV: Twice Upon a Time) The Time Lord was well aware of the fact that Rusty could simply telekinetically recall the blaster, yet understood the action was a sign Rusty was willing to talk. (PROSE: Twice Upon a Time) When the Doctor persuaded him to help as aiding him in any form would hurt the Daleks greatly, (TV: Twice Upon a Time) Rusty proclaimed that the logic was ingenious and approved of it being, as the Doctor then said, "just a little bit evil". With that, the Doctor understood he could approach Rusty.

Nonetheless, Rusty mocked the Doctor after he tapped his sonic sunglasses to the Dalek's manipulator arm to transfer the little information about Testimony he did know; instead of remarking that the Doctor was a good Dalek, Rusty remarked that the Doctor "would make a good Time Lord", entirely to ridicule the Gallifreyan. (PROSE: Twice Upon a Time) Rusty projected the information from the Pathweb, revealing to the Doctor that the Testimony was simply a University of New Earth way to preserve the dead; in effect, the Doctor saw "its not an evil plan". After providing him the information he desired, the Twelfth Doctor left Rusty. (TV: Twice Upon a Time)

Behind the scenes

 * Originally Rusty was planned to blow up on the Dalek ship. This ending can be seen in an early black and white version of the episode, which leaked online before the original episode's release.