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?
Dawn, May, and Zoey are seen in their Lakeside Resort room sitting on the floor, chatting. Dawn explains the her mother’s Top Coordinator title inspired her to compete in Pokémon Contests. May reveals that she struggled with Pokémon at the beginning of her journey, but later found joy in Contests. A sudden crash interrupts the girls’ conversation, but it turns out to be Ash who was dreaming about being in the middle of a tough battle. Ash decides to take a walk along the Valor Lakefront with Pikachu.
While looking over Lake Valor, Ash and Pikachu enjoy the night breeze. Ash tells Pikachu how happy he is with his decision to compete in the Wallace Cup, adding that Buizel is performing exceptionally. Ash believes that the competition is stirring up something brand new for him and Buizel that can only be good for their future growth. Suddenly, the two notice a small whirlpool in the water. A projected soul then emerges before returning to the lake. Ash barges into his room, hurriedly describing the projected soul to Brock and the girls. Dawn's Piplup uses Bubble Beam on Ash to wake him up, but Ash assures them he is fine. Then the five sit down to discuss the mysterious 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. Zoey, being from Snowpoint City herself, confirms this as she heard the same stories when she was young. Zoey admits that the three Sinnoh lakes have similar legends, and Brock considers whether these sightings are connected to the Space-Time legend.
The second round of the Wallace Cup begins the next day. Wallace greets the Coordinators. The match ups are announced, and Dawn finds out that she will be the first to battle. Spurred on by her friends, Dawn sends out Buneary to battle an unnamed Trainer's Wailmer. Wailmer shoots out a Brine, which sends Buneary into the air and costs Dawn some early points. Buneary then uses the spout to perform backwards somersaults. The dynamic display of cuteness earns high praise from Wallace and Wailmer's Trainer to lose big points. Buneary then uses Bounce continuously on Wailmer, and its Trainer loses even more points. Then Wailmer approaches with Surf, causing Dawn to lose points before Buneary takes control of the situation with a spin. Buneary strikes her opponent with some Dizzy Punches. Wailmer retaliates with an acrobatic display of Hidden Power, but Buneary leaps out the way and races towards Wailmer as the Hidden Power follows her. She bounces off Wailmer and out of the way, and Hidden Power hits Wailmer instead. Wailmer tries a Body Slam, but Buneary's Ice Beam freezes it solid and it falls back into the pool. Finally, the timer reaches zero, and Dawn and Buneary win. Her friends also do well; Ash and Buizel defeat a Kecleon, Zoey's Shellos knocks a Mareep out with Mud Bomb while May and Skitty use Blizzard to clear the round.
Jessie, as Jessilina, is on the sidelines, upset that she did not make it to the second round. Meowth and James try to cheer Jessie up by suggesting they become reporters. Jessie returns with her bold Jessadia disguise, ready to take the media by storm. Later, Dawn and Pachirisu advance to the semi-finals after winning their quarter-final battle, this time over a girl with her Pelipper.
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, and the others are concerned because Lanturn's part Electric gives it the advantage over Water Pokémon like Buizel. Lanturn starts things off with Charge, with the powerful display causing Ash to lose points. Buizel launches a Sonic Boom into the water, knocking Lanturn high into the air, costing Kyle a quarter of his points. However, that gives Lanturn the added height to launch a direct Thunderbolt on Buizel, who is left paralyzed. Brock notes that because Charge increases the power of the next Electric-type attack used, the Thunderbolt did even more damage to Buizel. The mid-air display of a super-effective attack drops Ash's points down to half. Kyle confidently declares he already knows all of Ash's strategies and how to counter them because of Ash's decision to use Buizel in all the Contest rounds rather than switch Pokémon like all the other Coordinators. Lanturn launches Ice Beam in mid-air, costing Ash points. Ash calls for an Aqua Jet with a spin, and the improvised "Ice Aqua Jet" strikes Lanturn. Wallace is awed by the attack, as is May, and Kyle is left with only thirty percent of his point total. Buizel gets hit by Hydro Pump and then returns to the stage. Buizel then uses Water Pulse but fails due to Lanturn’s counter Thunderbolt. The collision creates a shower, catching Ash and Buizel in a short but intense downpour. Just then time runs out, and Kyle has the most points, eliminating Ash from the Wallace Cup. Afterwards, Jessadia interviews Ash after his loss. Jessadia raves about how Buizel's Ice Aqua Jet is the talk of the tournament and how even Wallace was amazed. Her exaggerated enthusiasm, however, leaves Ash nervous in front of the camera. Zoey and May clear their quarter-final battles with Misdreavus and Venusaur and join Dawn and Kyle in the semi-finals. Marian later compliments Jessadia's event coverage and says that she heard that Jessadia was an assistant reporter at the Kanto Grand Festival.
Back at the hotel, the group are sad that Ash didn't make it to the semi-finals. Dawn reminds him that she is pleased to see her "Ice Aqua Jet" technique finally perfected. Ash admits that Contest Battles are tough, but his Buizel was moving in perfect sync and that he'd do better next time. Ash pipes up again and looks forward to cheering everyone else on. Brock admits the competition is stiff with May versus Zoey, while Dawn still needs to beat Kyle. The three girls vow do the best and hope for photo finish.
The following day, Marian announces that today is the final day of the Wallace Cup. In preparation for her semi-finals match, Dawn offers Piplup some encouragement before recalling him and placing him into a Ball Capsule. Marian calls for the time to begin, so Dawn calls out Piplup with a Foamy Seal and Kyle calls out his Crawdaunt. Piplup twirls into action with a Bubble Beam, while Crawdaunt uses Sludge Bomb to counter.