As @MauroALLEGRANZA has indicated in the comment's Löwy's Fire Alarm is a good resource and probably the only text in English to address the whole of Benjamin's On the Concept of History thesis by thesis. Nevertheless, I thought I might attempt to give some kind of reading of it to address the points you raise. Sorry for the lengthy amount of text.
The first sentence of this thesis is very important. It announces more or less the task of the rest of the thesis, albeit in a negative way. To "recognize 'how [the past] really was'" is the task set for history by Leopold von Ranke, one of the key figures in developing historiography based on primary sources. It is this view that Benjamin is completely opposing, as is made clear in the French version* of the thesis which begins:
«Décrire le passe tel qu'il a été» voilà, d'après Ranke la tâche de l'historien. C'est une définition toute chimérique.
"To describe the past as it was" there, following Ranke, the task of the historian. It is an entirely chimerical definition. (My translation)
If representing "how it really was" is a chimera then what is the task of history? History cannot be objective; it is always partial. "Not even the dead will be safe from the enemy", i.e., their history will always be re-written by the victors and the powerful to serve their own ends. (Hence the danger which lies in "handing itself [the dead and what they represent] over as the tool of the ruling classes"). Or as Löwy puts it:
The alleged neutral historian, who has access directly to the 'real' facts, in reality only reinforces the view of the victors — the kings, popes and emperors (the preferred object of Ranke's historiography) of all ages. (p. 42)
Instead, Benjamin's positive conception of history starts from the second sentence: "It means to take control of a memory, as it flashes in a moment of danger." Once again, the French version may be helpful for clarifying this:
La connaissance du passé ressemblerait plutôt à l'acte par lequel à l'homme au moment d'un danger soudain se présentera un souvenir qui le sauve.
The knowledge of the past would rather resemble the act by which a man at a moment of sudden danger offers himself a memory that saves him.
Admittedly, this is still a somewhat obscure phrasing. How does a memory save someone? Memory, for Benjamin here, is not simply a passive faculty for recalling what has happened, but a source of inspiration; hence the suggestion that there are "sparks of hope in the past" to be set alight. The past is not simply over and done with, but has been, in some way, passed on. "There is a secret protocol between the generations of the past and that of our own," Benjamin writes in thesis II.
If such a memory appears — and I do not think that for Benjamin the appearance of such a memory is guaranteed by the moment of danger, but only made possible by it — then this is what historical materialism must "holding fast to," the saving image that arises in the moment of danger. Löwy suggests that this works because:
The danger of a current defeat sharpens the sensitivity to preceding ones, arouses interest in the battle fought by the defeated, and encourages a critical view of history. (p. 43)
Thus, it is not a matter of holding fast to "how it really was," but rather to the sparks of inspiration that still live on in memory.
These sparks of inspiration is what (in my view) Benjamin means by tradition. The tradition is not something simply handed over, since it is, in a sense, still unrealised. This is why "in every epoch, the attempt must be made to deliver tradition anew"; the enemy of this task is "the conformism which is on the point of overwhelming it."**
To spell this out a little more clearly: the task of any historical materialist version of history*** is the production of the self-consciousness of the proletariat. The production of this self-consciousness does not seem to form of its own accord. Why? Ultimately, Benjamin's diagnosis seems to be that people tend to identify with their rulers (this is the conformism) and hence they tend to serve "as the tool of the ruling classes." If the point of historical materialist history is to fight this tendency then it must produce a different image of history, one which says something like the conditions under which you live are not natural nor are they the only possibility. The images of the past held onto by historical materialism hence become something useful: they reveal other possibilities already present (as history, as this tradition).
The point of a historical materialist conception of history is to save people from the current oppressive structures; hence it has not merely a historical purpose, but a messianic one as well. The phrase "the Messiah arrives not merely as the Redeemer; he also arrives as the vanquisher of the Anti-Christ" is meant to indicate that the purpose of historical materialist history is not simply salvation; it must also work to undo the work of "the enemy" (the ruling class) and so to utterly destroy it.
Finally, it is important to remember that this is not simply some sort of abstract game. It has a real, historical context. The text was written around 1940, with the rise of the Nazi party and their concomitant re-writing of German history to produce a certain image of what being German is: the Aryan master-race that runs free over a completely Jewish-free Germany. Benjamin's hope, perhaps, was that in this moment of crisis, something else could emerge from the past, something that the Nazi's were actively trying to oppress.
[*]: On the Concept of History has a complex history as a document. It was never intended nor prepared by Benjamin for publication and there are at least 7 slightly different manuscript versions of it that had been given to various of Benjamin's friends. These are all compiled in a volume from Suhrkamp's critical complete edition [Kritische Gesamtausgabe] of Benjamin's work and notebooks (which differs from the collected works [Gesammelte Schriften] that is the edition usually cited). The French edition referred to is a French translation of the document Benjamin himself made but never published. The variations in the various German editions are usually quite minor; the French has some actual departures, so I'm treating it as a source for further explicating what Benjamin is saying.
[**]: In this instance the Zorn translation, published in Reflections: Essays, Aphorisms, Autobiographical Writings, is superior if somewhat more figurative:
Every age must strive anew to wrest tradition away from the conformism that is working to overpower it.
The key is that this a battle that is already going on.
[***]: It is controversial just how "Marxist" Benjamin intends to be, but I'll leave that aside.