The Zombie Island of Dr. Ned is the first installment of downloadable content for Borderlands and includes new quests, items, and enemies - including WereSkags and various zombies. The storyline takes place in an area known as Jakobs Cove which is a small town built by the Jakobs Corporation. Dr. Ned had been in charge of keeping the workers of Jakobs Cove alive, but ended up transforming them into zombies. The main plot revolves around finding previous visitors to Jakobs Cove and investigating Dr. Ned himself after the Jakobs Corporation become suspicious of his work. The playable area includes a large outdoor map with several further areas branched from the main zone - including a dark, abandoned version of previous area 'Old Haven'.
Source: Wikipedia, "Borderlands (video game)", available under the CC-BY-SA License.