Dr Manhattan is effectively a God. However, his vast power and ability to perceive all points along his time-line simultaneously, and lack of ability to experience emotions, means he has just lost interest in the human race. The point of the story is not about the characters fighting and winning or losing; its a deconstruction of the whole concept of the 'costumed vigilante' or superhero, and Dr Manhattan is just a plot vehicle to allow Moore to explore what having a de facto God walking among us would be like, what effect it would have on geopolitics (in the story, Dr Manhattan wins america the vietnam war and Richard Nixon gets elected 4 times as a result), and what having that sort of power would actually do to a person (he stops being a human, or caring what happen to us).
So in the story, (SPOILER ALERT................)
Dr Manhattan, possibly the most powerful creation in comic book history (he can create human beings- does that sound like someone/thing else we will all be familiar with...?) is effectively defeated by a mere man, and the villain (or is he?) 'wins'. But again, thats not the point of the story, its not really about who beats who- you really should read it, nearly 30 years on there is nothing else like it
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