Pressured by war hawks in Berlin and confident in the legacy of Frederick the Great's army, Prussia demanded Napoleon withdraw French forces east of the Rhine. Napoleon ignored the deadline, and within a week his Grande Armée annihilated the Prussian army at the twin battles of Jena and Auerstedt, occupying Berlin and forcing sweeping reforms of the Prussian state.
Prussia's leadership, egged on by Queen Louise and a faction that romanticized the army Frederick the Great had built decades earlier, believed their forces remained Europe's finest. They badly miscalculated. The ultimatum delivered on October 7 gave Napoleon until October 8 to pull French troops back across the Rhine—an impossible demand aimed at a man who had already out-maneuvered every coalition arrayed against him.
Napoleon didn't wait for the deadline to expire before setting his army in motion. Within a week, at Jena and Auerstedt on October 14, French forces under Napoleon and Marshal Davout shattered the Prussian army so completely that the state nearly ceased to function. Berlin fell without a fight, and Napoleon visited Frederick the Great's tomb, reportedly telling his marshals, 'Hats off, gentlemen, if he were alive we would not be here.'
The humiliation forced Prussia into radical reform—reorganizing its army, abolishing serfdom, and modernizing its bureaucracy under reformers like Stein and Hardenberg. The catastrophe of 1806, set in motion by this overconfident ultimatum, ultimately produced the leaner, more professional Prussian state that would help defeat Napoleon a decade later and dominate German unification in the century to follow.