After picking up the GS Ball from Professor Ivy, Brock decided to stay on the island so Ash and Misty head back home by blimp. Unfortunately, our duo gets double-crossed by Team Rocket once again, and Jigglypuff puts the whole crew to sleep. After another crash landing in the middle of nowhere they meet a new friend named Tracey while trying to help a Lapras that washed up on the beach.
After the events of the previous episode, Ash and Misty are freed from their cage after the blimp overturns in a crash-landing. As they exit the wreck, only to find themselves surrounded by a dense tropical forest. The pair trek for miles, and Misty fears it is a deserted island and they will have to eat bugs and Berries. Suddenly, a group of elderly tourists appear and pose for photos with Pikachu and Togepi. Ash and Misty stumble upon the Pokémon Park's entrance gate and are greeted by two woman in hula skirts, who put leis on the group. An announcement over a speaker confirms that Ash and Misty are on Tangelo Island, much to their relief.
They stroll along the city's waterfront and stop after Pikachu notices a Lapras stranded on the beach. Three men are verbally and physically abusing it, with one hitting it with a stick. Ash and Misty confront them, though the situation quickly grows hostile as the men reveal that they want the Lapras so they can use it to battle the Orange Crew. The trio sends out their Spearow, Hitmonchan, and Beedrill. Ash pits Pikachu against all three, but before any attacks are launched, someone calls out for them to stop. He steps forward, measuring and sketching all of the Pokémon. He quickly points out that Spearow is vitamin-deficient, Beedrill's coloring is poor, and Hitmonchan is lacking exercise. He contrasts the underdeveloped Pokémon with Pikachu, noting the shiny coat. The trio gets irritated and order all three Pokémon to attack, but Pikachu takes the three Pokémon down and sends them scurrying with a Thunder Shock. However, the watcher quickly shifts his attention to the Lapras. He hands Ash medicine while he runs to get Nurse Joy. Ash offers Lapras the medicine, but its knocks it away, with Pikachu catching it before it breaks.
At the Pokémon Center, Nurse Joy concludes that Lapras only needs a rest, but she reveals that it is afraid to have any human contact, probably based on how the three men were abusing it. The watcher points out that it is only an infant and that it might have gotten separated from its group after the last big storm. He reveals that he is a Pokémon watcher and that he observes Pokémon in their natural habitats. Ash and Misty introduce themselves, and the watcher introduces himself as Tracey. Ash and the others decide to work together in returning Lapras to its group. Meanwhile, Team Rocket watches nearby and decides to steal Lapras.
Three kids run in and ask Nurse Joy to heal their Pokémon in preparation for battling the Orange Crew. Tracey tells Ash about the Orange Crew and how Trainers must beat every member before competing in the Orange League. Ash wants to compete, but Misty reminds him that they need to deliver the GS Ball to Professor Oak. Ash places a call to Oak, presenting the GS Ball and requesting to compete in the Orange League. After Oak concedes, Tracey declares himself a part of the group in the hopes of eventually meeting Oak, his idol. As Misty objects, Nurse Joy tells the group that Lapras is awake and feeling much better.
The group wants to load Lapras aboard a truck to take it back to sea, but Lapras is afraid to move. Ash decides to sing a lullaby, but Jigglypuff comes up and beats him to it, putting everyone to sleep with Sing. Jigglypuff gets angry and doodles on everyone's faces, even ruining Tracey's sketch. After everyone wakes up, Lapras still won't budge from the Center pool. Ash tries to get close to Lapras, but it retreats underwater. Ash takes off his hat and vest before jumping in and swimming after Lapras. Lapras evades Ash, forcing him to resurface for air. Just then, Team Rocket fires a smoke pellet into the pool, creating a white smokescreen as they tie Lapras to their own truck. As Tracey is amazed at Meowth's talking ability, James orders Weezing to use Smog, allowing them to escape in their truck. Tracey sends out Venonat to use its radar eyes to track the truck before they can pursue.
While Team Rocket follows the steep cliff roads, Ash and his friends cut across the hilly landscape on bicycles. Ash gets close enough for him to jump off his bike and directly onto the truck bed. Ash moves forward and climbs inside the cabin, while Misty and Tracey stop pursuing due to fatigue. Pikachu attacks with Thunderbolt, which knocks James out, and he accidentally presses a switch that detaches the trailer. Ash and Pikachu get back onto the truck bed as they head up a ramp. James brakes as the truck heads towards a steep cliff edge, but the momentum of the truck bed with Lapras behind them is enough to push Team Rocket off and they are sent blasting off. While the trailer doesn't follow suit, as Ash loosens the rope binding Lapras, it begins to roll backwards and towards another steep drop. Ash clambers to the side, and his weight helps shift and turn the trailer in time to prevent a descent. However, they quickly approach another cliff and the same technique fails. Ash and Pikachu grab onto Lapras just before all three crash into the sea.
Misty and Tracey follow Venonat's senses, which lead them to the beach. In the distance, Ash and Pikachu arrive on Lapras's back. Nurse Joy notes that Lapras appears to be comfortable around Ash, and he proclaims that Lapras has been caught. Tracey joins Ash and Misty as they leave Tangelo Island.
Team Rocket's truck is using the left-wheel placement to drive on the right, but on most other episodes where wheeled transportation is seen, the opposite is used and transport drives on the left as in modern real Japan.
However, the Orange Islands may be not part of the country as the mainland is, because when Team Rocket offers the blimp to Ash and his friends in earlier episodes, baggage customs processing is mentioned by them in both ways of the flight.
When the punks' Pokémon freeze, the Spearow is in the middle. However, after Tracey examines them, the Hitmonchan is in the middle with the Spearow on the left.
When Ash calls Professor Oak, he initially has the phone against his ear. However, in all subsequent scenes during the call, the receiver is nowhere to be seen.
When Ash is riding the bike after Team Rocket, he jumps off. No one moved to avoid the bike, even though they would have flipped over it.
When Ash jumps back out of the cab of the car, the hitch is still attaching the bed and the cab of the car even though it was released earlier.
When Team Rocket appears in the car, James's boot is gray instead of black.
In the original version, the hula girls who give Ash and Misty the leis tell them oniai desu yo. They could either be saying "these look good on you", or "you guys match well", a term used to refer to a matching couple. In the dub, the girls only welcome Ash and Misty to the park.