Part 2 ends with Night Owl boarding Archie along with the Comedian to stop some disturbs. This was seen as a flashback in the movie.
The first part of the game tells an alternate story about the 1970's Watergate Scandal never seeing the light, with Night Owl and Rorschach failing to save FBI agent Mark Felt and journalists Bob Woodward and Carl Bernstein from being killed by the Comedian (this explains Nixon's fifth re-election seen in the movie). The second part is settled during the police strikes during the decade.