It's piracy on the open seas and Ash and friends must rescue a local school of Lapras from would-be poachers, but how can they be of help when the Lapras, conditioned to fear humans, shun the young Trainers?
Ash is still fascinated by his victory and Winner's Trophy, while he and his friends travel to the next island. Lapras suddenly senses something, and makes a quick turn in excitement. The group spots a school of Lapras ahead. While Tracey sketches them, Misty brings up the possibility that this school is the one Lapras belongs to. Lapras approaches the school and calls out, but everyone ignores it. One of the Lapras, a teal-colored one, tries to return the call, but the others push it away. The trio is left stunned as one of the Lapras attacks with Water Gun before using Mist to cover their escape.
At a nearby Pokémon Center on Tarroco Island, Ash talks to Professor Oak over a videophone. Oak explains that those Lapras may be scared of humans due to a previous attack. Officer Jenny approaches the group and suggests that it must be linked to Pokémon poachers in the vicinity. Jenny explains that several pirates led by Captain Crook have fired at the Lapras and attempted to catch them in a no-capture zone. Ash is furious and believes Team Rocket is behind it. However, Jessie and James are in the building recovering from attacks inflicted by the poachers. They overhear Ash's comments from a nearby room and refute the claims before launching into their motto. They reveal that a cannonball exploded near their submarine, sending it crashing onto the island and damaging it. Before Officer Jenny can pull up their files, Team Rocket flees.
Nearby, the school of Lapras moves on as the teal-colored Lapras looks out. A pirate ship manned by Captain Crook approaches them and fires cannons loaded with Poké Balls, which release several Tentacruel that surround the Lapras. They attack with Poison Sting, but the lead Lapras uses Water Gun to block the attack. The pirates deploy more Tentacruel to cut them off as Ash's group finds the Lapras under attack. Misty realizes the pirates are merely using the Tentacruel to bully them. Tracey and his Marill head back to Tarroco Island to get Officer Jenny while Ash and Misty race in to intercept.
Team Rocket follows in their Magikarp submarine as the Tentacruel surround the school. The captain orders all of them to attack, but Ash's Pikachu stops them with Thunder Shock. However, because water conducts electricity, the Lapras group, Ash, and Misty are also injured. The Tentacruel break off to attack Ash as the pirates confront them, firing cannonballs at Ash's Lapras. It dodges quickly as Ash sends out Squirtle to join Misty's Poliwag, Goldeen, and Staryu. Misty leads the Pokémon to fire Water Guns at the ship, destroying the cannons and masts, as well as putting holes into the ship. Crook barks at them as the WaterPokémon fire at once, knocking him back. The pirates run out of cannonballs, so the captain fires Scuz at them, but the Pokémon stop him with Water Gun.
Ash taunts the Tentacruel, but it fails to distract them. Ash's Lapras fires Water Gun at the leader, making it angry and prompting the Tentacruel to continue chasing Ash's Lapras, allowing the school to flee. The Tentacruel begin to catch up with Ash's Lapras, unintentionally crashing into Team Rocket's submarine and sending them blasting off in the process. As the Tentacruel surround Ash and Lapras, Misty takes control of the ship, ordering Crook to call off the Tentacruel back, but he refuses. Ash's Lapras fires Water Gun at a Tentacruel as the captain orders Supersonic attacks. All of the Tentacruel fire, crippling Ash, Pikachu, and Lapras with headaches. The lead Tentacruel rushes forward to attack, but the school of Lapras comes to Ash's aid, freezing the Tentacruel with Ice Beam, sending them plummeting underwater. The school approaches and Ash's Lapras meets with the teal one, revealed to be its mother.
Officer Jenny arrives in a patrol boat, taking the pirates and Team Rocket into custody. Misty allows the Tentacruel to go, and they happily swim off into the ocean. Meanwhile, Ash and Lapras share one last moment before it rejoins its school. Lapras dives underwater and comes under Ash, allowing him to get back onto the ship before rejoining the school. As they head off into the sunset, Ash, Tracey, and Misty wave it goodbye and thank it for helping them.