Spoiler:

The Theatre of Blood was founded shortly after the events that unfolded on Outland by Master Assassin Eyriour Lolindar Seragon, who had previously trained and proven his expertise at Ravenholdt Manor. The Theatre of Blood was founded in order to serve the Alliance from the shadows in the war against the Horde, and was swiftly conscripted to Northrend to serve in the war against the Lich King. The Theatre swiftly rose from a small group of like-minded founders to an organisation of over 100 individual members. During this time, the Theatre of Blood relayed information about Lich King's forces to the Alliance Military, and after the Wrathgate were employed to keep tabs on Horde movements throughout the frozen continent; assassinating Horde spies and assassins, drawing the ire of the Horde Assassins the ‘Vile Thorn’, and tracking the Horde’s campaign against the Lich King. The work of the Theatre culminated in the Storm Peaks, where a withdrawal of Alliance forces from the plains around K3, on Theatre intelligence, saved a Darnassian regiment led by the enigmatic Commander Fey from Horde ambush. Several members of the regiment, including brothers Naroma and Valik Herandir, applied for transfers from the Sentinels and joined the Theatre of Blood.

Back home, the Theatre's newly appointed Director, Skaraa Mikolaas, stood secretly within a group of Alliance home defence organisations called the ‘Last Alliance’ led by the experienced Dwarven mountaineer; Snoggi Firebeard. Their works with these organisations lead to campaigns against the Horde across northern Kalimdor, the Eastern Kingdoms, and even Outland.

With the attack on Icecrown Citadel the Theatre's founder Eyriour Seragon, and several experienced warriors, departed the Theatre to join an elite group of Alliance warriors known only as 'Nemesis'. Master Tharnenheim Stormhammer was left in charge of the Theatre in Eyriour’s stead. Master Tharnenheim was a Dwarvern 'noble' of a minor family, and as such his political machinations kept him preoccupied from the intricacies of running an Assassins Guild; leaving the day-to-day organisation to the Director Skaraa Mikolaas. It was during this period that the Theatre was deployed against a Burning Legion cult known infamously as 'The Dead Rose';  victories against this secretive organisation were modest, but a combined effort of Alliance home defence forces eventually lead to the death of their demonic leader. An Infiltrator within the shattered Rose was planted and, whether or not due to the Theatre, the organisation has never been heard from publicly again. With the death of the Lich King, the Theatre’s funding by the Alliance Military suffered, and it was at this moment when the Vile Thorn struck; assassinating Theatre spies, and crushing their safe house network. With the Theatre crippled, ‘Order 666’ was sent out to all Theatre operatives, instigating them to become sleeper agents and lay low until summoned.