Ash, his friends, Pikachu and Togepi hold their fishing rods out in hopes of finding some Pokémon. Ash, however, is bored at this, and soon gets into an argument with Misty. Suddenly, Misty gets something on her line, and begins to reel it in. It fights hard, but she finally pulls in a tea kettle from the water. Angered at this, Misty decides to use her secret weapon: her special lure. Misty tells of the reason she trains Water-types, that she grew up around them and so wants to train as many as she can. Suddenly a Totodile reveals itself to them, dancing on a rock in the stream. Ash scans it with his Pokédex.
After learning about the species, Misty declares that she intends to catch it, while Ash does the same. Before Ash can throw his Poké Ball, however, Misty tosses her lure at Totodile, who chomps down on it. Ash complains that it's not fair, and Totodile spits the lure out. Ash uses this as an opportunity to have Pikachu attack it, using Thunder Shock. Now stunned, Ash throws a Poké Ball. Misty and Ash begin to argue again, but the Poké Ball does not hold, and Totodile pops out of it on their side of the riverbank. Ash complains and tells Pikachu to use Thunder Shock again, but Misty interrupts, throwing her own Poké Ball. This time, Totodile dodges it completely and uses Water Gun to blast the Poké Ball and the three Trainers into the grass. The three climb out, but Totodile is gone. Ash and Misty decide to both go looking for it. Misty tells Brock to watch Togepi, but Brock insists that he should come along since they'll need a referee.
Meanwhile, Totodile is hungry, and notices Team Rocket having a snack of rice balls. Meowth, however, complains that the Boss will be mad at them for their constant failures, and the other two attempt to cheer him up. Jessie offers Meowth a rice ball, but Totodile chomps on her hand instead. Meowth and James are thrill to see Totodile and hope to deliver it to Giovanni, but Jessie is more focused on getting her arm back. Totodile then goes on to eat the rest of the rice balls, and when Team Rocket attempts to intervene, it blasts them off with Water Gun.
Ash and Misty finally locate Totodile, and both prepare to catch it. Misty decides to use her Lure Ball because of its better chance of catching Water-types, and Ash pulls out his own Lure Ball in anticipation. The two throw the Balls at the same time, and Totodile jumps as it is hit by both at the same time. The two Balls land behind a bush and Totodile is successfully caught, unseen by anyone. Due to the fact that both of them used a Lure Ball, no one can tell who threw it.
Ash and Misty begin arguing again, and Brock stops them, saying there's only one way to decide whose Totodile it is: a Pokémon battle. The pair agree to a three-on-three match. Ash hopes that to prove that he would have won their last battle had Team Rocket not interfered, and he decides to use Pikachu against Misty's Water-types. Pikachu is ready to battle, however Misty has a secret weapon up her sleeve, her only non-Water-type Pokémon, Togepi. Pikachu refuses to battle against its friend, and Togepi’s cuteness leads him to forfeit the round. Brock rules this to be a win for Misty, giving her an early lead.
Ash decides to use his Grass-type Chikorita next, as she also has an type advantage. Misty chooses her Staryu. Ash opens the fight with a Razor Leaf, but Staryu avoids it and uses Swift. Chikorita responds with a Tackle. Misty commands a Water Gun, and nearly defeats Chikorita, but she digs in her heels. Ash tells Chikorita to use Vine Whip, but it misses as Staryu jumps again to use Tackle. With a quick move, however, Chikorita evades the Tackle and tangles Staryu with another Vine Whip. Staryu’s central core begins to flicker and Brock gives Ash the second round. The match is now at one apiece, and it comes down to the last battle, both determined to win.
Ash sends out Bulbasaur, while Misty call on Poliwag for assistance. As Poliwag's DoubleSlap and Bulbasaur's Vine Whip are about to collide the scene cuts to Team Rocket, who are now drifting downstream. The evil trio are still set on capturing Totodile for the boss, but their conversation is interrupted when their log hits a boulder. Jessie emerges from the water and spots the match between Ash and Misty. Meowth spots an opportunity, and the trio plan to wait until the end of the battle to take Ash’s group’s tired Pokémon away. Poliwag’s Water Gun breaks through Bulbasaur;s Razor Leaf attack, forcing Bulbasaur to jump out the way. Bulbasaur follows up with another Razor Leaf and lands a direct hit. Brock is about to declare Ash the winner, but Poliwag is soon enveloped in a white light and evolves into a Poliwhirl. Ash scans it in his Pokédex, and then commands a Tackle from Bulbasaur. Poliwhirl uses Body Slam, and hurts Bulbasaur badly. Using Razor Leaf to get away, Ash asks Bulbasaur if it can continue, which it can. He commands a Solar Beam, which Bulbasaur begins to charge. Poliwhirl uses Bubble while the Solar Beam charges, battering Bulbasaur. Eventually the Solar Beam is fully charged, and Bulbasaur blasts Poliwhirl, making it unable to battle. Brock declares Ash the winner, and hands him Totodile's Poké Ball.
Before he can celebrate, the Pokémon Battler's Ladies Auxiliary shows up to congratulate them. A Wobbuffet's appearance, however, gives them away as no one other than Team Rocket, who soon reveals themselves after their motto. Meowth declares their intentions, but Ash reveals that he has Totodile, which bites off some of Jessie's hair. She sends out Arbok in anger, and tells James to send out Weezing. Arbok goes after Totodile, but Totodile uses Bite and whips Arbok around to knock both it and Meowth out. Weezing uses Sludge, but Totodile avoids the move with its fancy footwork and uses Scratch, which sends it back into the rest of Team Rocket. Using Water Gun, Totodile sends Team Rocket blasting off again.
Happy with winning, Totodile begins dancing with Pikachu, and Misty admits that she's not jealous that Ash beat her, but mostly because she has her Poliwhirl which listens to her rather than doing whatever it wants. The group then continues their journey towards Goldenrod City.