Ash is battling with another Trainer by the waterfront, not realizing he is being watched by a mysterious sailor. After he wins, Ash is confident and boastful. The kids decide to grab something to eat.
Team Rocket is currently working in a small restaurant, when the old sailor walks in and demands some hot milk. While he is there, Ash and friends sit down outside and talk about battling. The man approaches them, and Max recognizes him as Drake of the Elite Four!
Drake invites all of them (including the disguised Team Rocket) to his boat, where he challenges Ash to a battle. Drake sends out his Shelgon, and though it is slower, it waits for Pikachu to get just close enough to take it down with Dragonbreath and Dragon Claw.
Ash calls out Grovyle against Drake's Altaria, and though Grovyle has a better time leaping on the masts of the ship, it gets knocked out by some powerful moves from Altaria, including Aerial Ace and Solar Beam.
Team Rocket takes advantage of a weakened Pikachu to steal it, but Drake calls out his Salamence. It uses Dragon Claw and Flamethrower to send the thieves blasting off. With Team Rocket thwarted and a few lessons learned, Ash and friends have dinner with Drake and his crew on the boat.
Ash takes on another Trainer and his Scizor while Drake watches on from afar. Scizor goes for a Fury Cutter, but Torkoal uses Flamethrower, forcing Scizor to dodge it and stop its attack. Scizor responds with a Hyper Beam, but Torkoal tucks itself into its shell, negating the effects of the attack. As Torkoal emerges from its shell unharmed, Scizor's charges in with Metal Claw. Torkoal responds with Overheat to win the match. Afterwards, Ash and his friends decide to relax at a local restarant, unaware that Team Rocket are working there to make money to fund their schemes. James approaches to get the customer's orders, though is startled to see the twerps. He rushes back into the kitchen to alert his teammates to the twerps' arrival, so they consider kidnapping Pikachu. However, they decide to bide theit time for now after imagining the rather intimidating Drake, who is also a customer, blasting them off with a massive punch. While enjoying his hot cup of peppermint milk, Drake also notices the group through a window and approaches them. As May discusses strategy for her next Contest, Drake advises the young Coordinator that her choice of Pokémon is very important. May is startled by the man and Max suddenly recognizes Drake as a member of the Elite Four, surprising the group and impressing Team Rocket. Drake compliments Ash on his earlier battle. He promptly invites the group aboard his boat, as well as the waiters, Jessie and James, for the great glass of peppermint milk.
Drake escorts everyone to the docks as his grand ship sails into view. Once aboard, everyone marvels over the ship's grandeur. Max then asks Drake to show them his Pokémon, and Ash eagerly joins in. Drake instead suggests a battle with Ash, and the young Trainer agrees almost immediately. Brock cautions Ash given his earlier over-confidence, but Ash is certain that he'll win. Meanwhile, Team Rocket realize that this may be their chance to nab Pikachu. The first round of the three-on-three match begins with Drake choosing Shelgon while Ash selects Pikachu. Ash seems confident, thinking that Pikachu's Speed will give it the advantage. Pikachu starts off by using Thunderbolt, and it hits Shelgon directly. However, Drake seems calm. Pikachu repeats the attack, but this time Shelgon dodges it, although barely, with Double-Edge. Shelgon keeps charging at Pikachu, but he is easily able to avoid it with a Quick Attack. Believing that he has Shelgon all tired out, Ash tells Pikachu to use Iron Tail. Drake doesn't seem to react until Pikachu is in range before having Shelgon counter with Dragon Breath and follow up with Dragon Claw. The two attacks prove to be too much for Pikachu, and the little Pokémon faints. Ash retrieves Pikachu from the field as Brock comments favorably on Drake's strength in battle. Drake’s first mate, Fitzwilliam, admits that Shelgon's incredible endurance was key to Drake's strategy.
Drake brings out Altaria, and Ash responds with Grovyle. Max is worried because a Grass-type is weak against a Flying-type, but Ash seems to have a plan. As Fitzwilliam predicted, Ash has Grovyle jump from mast to mast, allowing it to reach the Flying Pokémon. It then uses Bullet Seed, but Altaria flies behind one of the masts to evade the onslaught. Grovyle prepares to lash its opponent with a Leaf Blade, but Altaria is nowhere to be seen. Suddenly, it appears from behind with a Take Down attack. With its opponent starting to wear out, Altaria then uses Dragon Breath, knocking Grovyle to the ground. Drake advises Ash that he needs to fully focus on the battle if he hopes to win. Altaria then charges downward with a Sky Attack, but Grovyle is able to dodge it with Quick Attack, before throwing out a Leaf Blade at its opponent. However, Altaria dodges the attack with Aerial Ace and fires a Solar Beam, which sends Grovyle crashing through two barrels before slamming into a wall and knocking itself out. Drake gently picks up Grovyle, and after a quick inspection admits that some rest at the Pokémon Center will help it recover. Ash agrees and recalls Grovyle. Drake commends Ash on his improved abilities, admitting that maintaining a clear mind will help him go far.
Drake invites everyone to have dinner on his ship after Ash's Pokémon have been treated at the Pokémon Center, and everyone happily accepts. Off to the side, Team Rocket put their latest Pikachu-nabbing scheme into motion. They distract May, who is holding the now-conscious Pikachu, with a drink. As May tries to take it, Jessie quickly snatches Pikachu from her hands, and Team Rocket jumps into their waiting balloon. The trio recites their motto as they remove their waiter uniforms. Drake wastes no time in calling out his Salamence, which uses a Dragon Claw on the balloon's basket, causing the balloon to shake violently. This, in turn, causes Jessie to drop Pikachu and Salamence swoops in to save the little Pokémon. With Pikachu riding on its back, Salamence unleashes a Flamethrower attack on the balloon, sending Team Rocket blasting off. May checks her Pokédex for information about Salamence, while Ash, watching Drake's Pokémon in action, comments that this must be the true power of the Elite Four.
That night, the group join Drake and crew for a hearty dinner. Drake tells Ash that he shouldn't focus so much on winning, but should always seek stronger and stronger opponents, having suffered from overly large self-confidence in the past as well. Ash nods at this advice, having learned a lesson in humility, and is now ready for his next adventure.