The kids are running for the ferry to Lilycove and jump on the boat they see leaving only to discover it's actually a boat to Bomba Island. Once they arrive on the island, they meet a young Trainer named Jimmy and his Wartortle, Charmeleon, and Ivysaur. Jimmy is a student at the Pokémon Battle Judge Training Institute, located on the island.
Professor Serena from the institute gets Ash and Brock to help out in her class by staging a Double Battle which Jimmy will judge. Ash uses Swellow and Corphish, while Brock uses Mudkip and Lombre. The battle is fierce, and after Mudkip and Lombre both use Water Gun on Corphish simultaneously, Jimmy mistakenly declares Corphish unable to battle.
That night, Ash and friends find Jimmy outside talking to his Pokémon. Jimmy explains how he met all three of them by accident, and even got a Cascade Badge—also by accident. Team Rocket interrupts and takes all three of the Pokémon, causing Jimmy to run after them. Seeing his determination, Wartortle evolves into Blastoise, and uses Hydro Pump to free the others. Team Rocket is then defeated as usual.
Serena tells Jimmy he has to leave the school now, but not because he's a bad student, but because he'd make a better Trainer. Jimmy heads back to Lilycove to start his Pokémon journey over, while Ash and friends continue on to Mossdeep City.
Ash and his friends are running to catch the boat to Mossdeep Island, but in their haste, they get on the wrong boat which is headed for Bomba Island instead. As they arrive at their destination, Max reveals that there is no direct ferry from Bomba Island to Mossdeep Island. Just then, an Ivysaur, Charmeleon, and Wartortle pass by the group, each carrying a heavy box. Ash explains that they are the evolved forms of Bulbasaur, Charmander, and Squirtle, the Kanto starter Pokémon. The group bumps into Jimmy, the Trainer of the three Pokémon, and himself a referee-in-training. After helping them move a few boxes, Jimmy explains that there is a major Pokémon Battle Judge Training Institute on the island, and Ash and friends decide to take a look around. The institute's teacher, Professor Serena, enlists Ash and his friends to help teach some trainees by holding a mock battle. Meanwhile, Team Rocket has managed to follow the group using their Magikarp submarine, and the trio plots to steal Jimmy's three Pokémon.
Ash and Brock face off in the institute mock battle with Jimmy judging, with Ash choosing his Swellow and Corphish and Brock using his Lombre and Mudkip. After a few exchanges, Ash manages to back Lombre into a vulnerable position. As this is a battle to test the judges more than the Trainers, though, Brock has his Lombre play dead rather than reposition itself, meaning that it appears unable to battle. While Jimmy wonders if he should call the match, Ash orders Swellow to do an Aerial Ace attack. Lombre, however, springs back up at the last moment. Unfortunately for Brock, his sneak attack fails to knock out Swellow. Brock orders a double Water Gun against Swellow to finish the fight, but Ash orders Corphish to shield Swellow from the blow. Corphish initially buckles beneath the force of the attack, and Jimmy decides to call Corphish unable to battle. However, his amateur judgment is also premature and Corphish springs back up moments later. The teacher, Serena, scolds Jimmy quite forcefully. She goes on to say that he's still studying and will make mistakes sometimes, and this is the time to make mistakes. Also, whether right or wrong, a referee must appear confident.
After night falls, Jimmy sits outside with Pokémon, brooding over his mistakes earlier in the day. Ash and his friends go out to find Jimmy, Jimmy tells them his whole story, including how he got his three Pokémon. He tells them that Wartortle, who was a Squirtle, was his starter. He got Ivysaur by accidentally giving it a sandwich. Finally, he traded a golden Magikarp that he accidentally found to an old man for his Charmeleon. He also shows them his only Badge, a Cascade Badge, and Ash tells him that he must be a pretty good Trainer to have beaten their friend and Gym Leader, Misty. Jimmy explains that this was given to him by Daisy for cleaning the Cerulean Gym's pool; Misty was away when he visited Cerulean City. Jimmy tells Ash that he has had a long streak of bad luck, and came to the judging academy by accident, adding that he ended up on Bomba Island after his moored boat drifted away from Lilycove’s ports while he was asleep. Professor Serena appears, and encourages Jimmy to focus on using his heart.
Meanwhile, in the distance, a Team Rocket mecha drives up onto the beach, with the villainous trio determined to capture Jimmy's three Pokémon. The mecha that Team Rocket is using has three Poké Ball-shaped prisons, each of which steal and hold one of Jimmy's Pokémon. Jimmy gives chase. Somehow, Jimmy gets atop the mecha and tries to free his Pokémon with a sharp rock, but he is easily knocked off the mecha. Jimmy becomes disheartened, but Serena gives him a speech about his good heart, which renews his faith. He rushes towards the mecha, only to be punched by its claw. Determined to free itself, Wartortle evolves into Blastoise, and its increased size breaks open its containment chamber. The other two are also released by Blastoise using Hydro Pump. The three use a combination of Razor Leaf, Flamethrower and Hydro Pump to send Team Rocket blasting off. Serena advises Jimmy that he should become a Trainer, not a judge. The next day, Jimmy takes his mentor's words to heart and prepares to sail back to Lilycove City to continue his journey. Ash and his friends hire a boat and get back on course to their next island of choice.