With Dawn and her friends safely past the appeals round of the Wallace Cup, the girls enjoy an opportunity to sit back and chat while Ash, who can't sleep, decides to take a walk near Lake Valor. He gets the shock of his life when he sees a glowing entity above the lake, which just might be a Legendary Pokémon like the ones said to live in Lake Verity and Lake Acuity! But any further investigation will have to wait until the next morning, after the Wallace Cup resumes.
As the battles begin, size proves to be no obstacle for Dawn's Buneary as it uses acrobatic footwork to defeat its opponent Wailmer. This round is off to a great start for Dawn, but Jessie is depressed that she didn't even make it to this stage of the Contest. Fortunately, James and Meowth remind her that she can always pose as a Contest reporter to get back in the spotlight. Dawn clinches a place in the semifinals, and then it's time for Ash and Buizel to battle Kyle the Coordinator and his Lanturn.
Kyle has had plenty of time to study Buizel's moves, an edge which helps him knock Ash out of the competition. With Dawn through and Ash out, that leaves May and Zoey still to compete. They win their matches and advance to the semifinals, so Dawn will definitely have to face either May or Zoey if she wants to win the Aqua Ribbon! But to get to the final round, she'll have to defeat Kyle and his Crawdaunt—is her Piplup up to the task?
The episode begins with recaps from the previous episode. Later, Dawn, May, and Zoey are seen in their Valor Hotel room sitting on the floor, chatting. Munchlax and Ambipom are eating while Piplup and Buneary are staring at May while she is talking about Pokémon Contests. They all hear a crashing noise that comes from Ash's and Brock's room. Ash has fallen on his head from his bed! He was dreaming about being in the middle of a tough battle. Ash decides to go for a walk at Valor Lakefront with Pikachu.
At the lake, Ash sees a view of the city, with the Contest Hall at the front while enjoying the night breeze. Then he and Pikachu see a small whirlpool - like movement in the water. A projected soul appears in the middle. They stare at it curiously as it dances in the breeze. The projected soul returns to the water.
Ash barges into his room, hurriedly describing the projected soul to Brock. May, Dawn, and Zoey enter the room. Ash describes "the thing" in Lake Valor as he did to Brock. Dawn's Piplup uses BubbleBeam on Ash in order for him to calm down. Then the five start having a conversation about the light at Lake Valor. Then Dawn remembers the projected soul she saw emerge from Lake Verity on her first day as a Trainer. May then says that while she was in Snowpoint City she heard stories about the legendary Pokémon that lives in Lake Acuity, which is near Snowpoint City. Zoey, being from Snowpoint City herself, confirms this as she heard the same stories when she was young.
The second round of the Wallace Cup begins the next day. Wallace greets the coordinators. Dawn finds out that she will be the first to battle. Zoey, Ash, Brock, and May wish Dawn good luck on her battle.
Dawn sends out Buneary to battle the unnamed Trainer's Wailmer. Wailmer shoots out a Brine, which causes Buneary to bounce up and down on, causing Dawn to lose points. Buneary then uses the bouncing to perform backward somersaults on the Brine, causing Wailmer's Trainer to lose points. Buneary then uses Bounce continuously on Wailmer, and its Trainer loses even more points. Then Wailmer uses Surf, causing Dawn to lose points before Buneary spun. During the spin, Buneary created a spiral of water, and Wailmer's Trainer loses even more points. The gang cheers Dawn on. Then Buneary uses Dizzy Punch, which hits Wailmer. Then Wailmer uses Hidden Power to counter Dizzy Punch. Buneary dodges the move and races toward Wailmer as the Hidden Power follows her. She Bounces off Wailmer and out of the way, and Hidden Power hits Wailmer instead. Then Wailmer intends a Body Slam, but Buneary's Ice Beam hits Wailmer, who becomes frozen solid. Finally, the timer reaches 0:00, and Dawn and Buneary wins! Dawn receives some outstanding remarks from the judges. The gang is proud of Dawn. The next few scenes show the gang's Pokémon attacking the opponent's Pokémon.
Jessie, as Jessilina, is on the sidelines, depressed that she did not make it to the second round. Meowth and James try to cheer Jessie up, but they don't do so, however. Jessie is later cheered up when she hears that she could go back to being disguised as a reporter, or her Jessadia disguise. Jessie cries and accepts.
Later, it shows Dawn and Pachirisu and a girl with her Pelipper finishing their battle, and Dawn moves on to the semi-finals.
Now it's Ash's turn to battle, this time with Kyle. Ash sends out Buizel, and Kyle sends out Lanturn. Dawn scans Lanturn on her Pokédex. The gang is worried about Buizel, due to Lanturn being part Electric, which is strong against Water types like Buizel. Lanturn starts things off with Charge, but Ash loses points due to not sensing where Lanturn is. Meanwhile, the coordinators are still worried about Buizel. Buizel launches a SonicBoom into the water, knocking Lanturn high into the air, also including a point loss. However, that gives Lanturn a chance to use Thunderbolt from the air. It drastically hits Buizel, making Ash lose a large amount of points. Buizel is now seen to have become paralyzed. Lanturn launches Ice Beam, and loses points. But Ash knows what to do and orders an Aqua Jet in order to make an "Ice Aqua Jet". Everyone is amazed at the improvised yet good-looking move, with Dawn the most surprised having tried teaching Buizel the technique herself before she traded him to Ash. The attack strikes Lanturn which makes Kyle lose lots of points! Meanwhile, in another town Paul who was watching the battle loses interest and walks off, remarking how pathetic he considers Ash. Buizel gets hit by Hydro Pump and then returns to the stage. Buizel then uses Water Pulse, but fails due to Thunderbolt. The collision creates a shower, catching Ash and Buizel in a short but intense downpour. Just then time runs out, and despite the Ice Aqua Jet Kyle still has more points, eliminating Ash from the competition. He and Buizel are left disappointed and soaking wet.
Jessadia interviews Ash after losing, and Ash responds with "Okay", and "Thanks, but I didn't make it up!". Like earlier, it shows the remaining main characters' Pokémon attacking their opponents' Pokémon. Then Jessadia announces that Zoey and May will move on to the final round. The board is shown with Kyle, Dawn, May, and Zoey, in that order. Marian later compliments Jessadia's announcement and says that she heard that Jessadia was an assistant reporter at the Kanto Grand Festival. She says "thank you" to Jessadia.
Back at the hotel, Ash and the others are sad that he didn't make it to the semi-finals. However, they made some compliments on their "Ice Aqua Jet". Ash says that Contest battles are tough, but his Buizel was moving in perfect sync and that he'd do better next time. Then Dawn thinks about how tomorrow's semi-final will turn out.
The final day starts with Dawn and Kyle battling. Will Dawn be able to beat Kyle?