There's big trouble in the big city when Ash and our friends pay a visit—a mysterious talking Pokémon known as Red Lighting has been battling all the Trainers in town, and it acts like a real bully when it wins! May's plans for a nice day out are ruined when Red Lightning humiliates her and her Squirtle, so now our heroes are out to uncover who or what is behind its activities. To catch up with it, our heroes commandeer Team Rocket's balloon and follow Red Lightning back to a huge house.
There they meet Red Lightning's owner, a little girl named Luna. Luna isn't about to apologize, so Pikachu battles Red Lightning and the truth is revealed: Red Lightning is a Scizor in disguise! Luna was behind the whole thing, even equipping her Scizor with hidden speakers so she could be its voice. With or without a costume, however, her Scizor is incredibly fast. To keep up with its speed, Ash decides to call on Sceptile. When Scizor ends up on the losing end, Sceptile even saves it from a nasty fall, but Luna is less than grateful.
Luna's butler explains that her parents are often away due to work, and that's why she has an attitude that started all the Red Lightning trouble. To help her feel less lonely, May challenges Luna to a real Pokémon battle. Squirtle comes out the victor in its rematch with Scizor, but Luna doesn't mind. She doesn't need to pick on Trainers now that she's experienced a fair Pokémon battle, and she'll be cheering for May as our favorite Pokémon Coordinator heads to the next Contest!
The mysterious Red Lightning confronts a trio of boys in an alleyway, challenging them to a Pokémon battle. Hiroshi calls out his Poliwag, beginning the fight with Water Pulse. Red Lightning retaliates with a Hyper Beam attack that instantly knocks out Poliwag. Red Lightning approaches the defeated Pokémon, crouches, and leaves his mark—a series of scribbles—upon it. Hiroshi rushes to his Pokémon as Red Lightning rides a gust of wind to reach a rooftop and disappear.
On their way to the Battle Tower, the group are passing through Commerce City. The boys stop at the local Pokémon Center while May leaves to do some shopping. Brock quickly locates Nurse Joy and begins to confess his love, though Max quickly drags him off by the ear. Suddenly, the three boys arrive with the fainted Poliwag. Given Ash and company's unfamiliarity with the mysterious individual known as Red Lightning, Nurse Joy tells them that he regularly challenges and defeats Trainers, then draws on their Pokémon's faces. Nearby, Team Rocket are disguised in janitor's clothing and plan to capture the defeated Pokémon.
Afterward, May is outside diligently reading a textbook about Pokéblocks and feeding Eevee one. Munchlax is quick to notice and begins to complain, so May gives it a May's Pink Surprise. May then recalls Munchlax, Combusken, and Eevee back into their Poké Balls as she tries to figure out which of her Pokémon is missing. She eventually realizes that Squirtle has disappeared, and she soon finds it smelling some flowers alongside a Butterfree. A brief gust of wind carries Butterfree off into the sky and Red Lightning arrives on the scene, offering May a Pokémon battle. He doesn't give May much of a choice, however, and fires his signature Hyper Beam attack. Squirtle avoids the blast and counters with Water Gun. Red Lightning avoids Water Gun as it dives toward Squirtle and gets a lock on it. Red Lightning opens his claw and targets Squirtle with another Hyper Beam, knocking it unconscious. Red Lightning leaves its mark on Squirtle’s face. May is dumbfounded by the strange figure, his aerial escape, and the doodles on Squirtle's face.
Inside the Pokémon Center, Ash notices that all of the patient Pokémon have the same markings that the young boy's Poliwag had. May enters the building with her Squirtle, Red Lightning's most recent victim. The group heads out in the search of this "Red Lightning." Before long, a scream is heard in the distance. They rush over to find a young girl and her Chansey beaten by Red Lightning in another alley. A gust of wind alerts them to Red Lightning, standing on a gate and about to make his escape. Ash confronts him and tells Pikachu to use Quick Attack, but his target leaps out of the way. Pikachu fires a Thunderbolt attack but misses again, and Red Lightning moves in to take advantage of the situation. He uses Hyper Beam, but Pikachu dodges with a Quick Attack off of a nearby wall.
When the battlers land on the ground, a net emerges from the distance, which Red Lightning dodges easily. Team Rocket announce their appearance with their motto. Right after the motto ends, Meowth fires another net at Red Lightning, but he avoids it and bounces off of the balloon to escape yet again. Ash and his friends board the balloon's basket and temporarily form a truce with Team Rocket to pursue Red Lightning. The group follows him to the exquisitely-arranged garden rooftop of a tall building, where a young girl is seen holding a small notebook computer. With a press of a button, one of the nearby trees rockets into the sky and collides into Team Rocket's balloon just after Ash and his friends drop down from the basket. With Team Rocket sent blasting off, the rest of the group observes the girl and Red Lightning interact. Upon discovering that she is behind this, they emerge from hiding and confront her, but she reacts angrily and brushes them off. A well-dressed man comes from the house and apologizes for the actions of the girl, named Luna. She is quick to interrupt him, so a fed-up Ash challenges her to a battle. Red Lightning begins with Hyper Beam, but Pikachu launches himself high into the air with Quick Attack and follows up with Thunderbolt. Red Lightning counters the move with Swift, creating an explosion that defrocks him, revealing "him" to be a Scizor that "spoke" using a speaker in its collar. Pikachu chases after Scizor with Quick Attack, but he scrambles for a ledge when Scizor leads him off the rooftop.
Ash says that he will match Scizor's speed with that of his Sceptile. As Scizor flies off into the distance by using the building's updrafts, Sceptile is right behind it scaling the edifices. Scizor turns around and fires Hyper Beam. Although Sceptile leaps to avoid the attack, a gust of wind throws it in the beam's path. The hit makes Sceptile begin to fall, but it recovers in time by gripping onto a skyscraper. Sceptile notices the city's gusty winds and uses them to float through the air like Scizor. Sceptile then comes down with a powerful Leaf Blade, knocking Scizor unconscious. Luna begins to panic, but Sceptile reaches Scizor and rescues it from a disastrous fall. Sceptile returns to the rooftop with Scizor in tow. Luna is furious, adding that Ash had no business saving Scizor.
Luna’s Butler orders Luna to settle down, adding that she knows she is feeling lonely. He reveals that Luna's parents are often away on scientific work, leaving young Luna alone to occupy her time by inventing devices, such as the ones utilized in Red Lightning. May goes over to comfort the young girl and suggests they have a rematch between Scizor and Squirtle, with Brock as the judge. Luna agrees and initializes the battle with Scizor's Swift, which Squirtle defends against using Withdraw. Squirtle launches a Water Gun at Scizor, but it quickly avoids the attack. Squirtle follows up with an Ice Beam that freezes the stone walkway and causes Scizor to lose its balance. Squirtle uses the icy battlefield to rotate at high speed toward Scizor. It tries to dodge by jumping, but the high-speed Rapid Spin still connects and sends Scizor plummeting to the ground, knocked out. Squirtle strikes a dynamic pose as May is declared the victor. Having realized her thoughtless actions, Luna apologizes for causing trouble in the city and swears not to ever again. The Butler also informs May that a Pokémon Contest is due to be held in neighboring Gardenia Town, much to her excitement.