No sooner has Ash begun what he hopes will be his final gym battle in the Johto League than Team Rocket once again throws a wrench into his plans, making off with the Dragon Fang, an invaluable heirloom long held by the Blackthorn Gym. Ash and friends, along with the gym leader, give chase, but in their flight, Team Rocket leads them deep into a secretive area rarely visited by anyone but the Dragon Pokémon that dwell there. Perhaps angered by these uninvited guests, a large beast flies directly at Ash and friends as soon as they enter this area. Uncertain whether this shape be friend or foe, our heroes raise their guard and wait as it grows closer... and looms larger still.
Kaburagi takes his position as the battle judge, and announces that Ash will face Blackthorn Gym Leader Clair in a three-on-three battle. Clair leads with Kingdra, which Ash responds with Pikachu. Pikachu tries to Thunderbolt Kingdra, and despite a direct hit, Kingdra easily shakes the attack off. This puzzles Misty and Brock. Kingdra responds with Twister, which catches Pikachu. However, Pikachu manages to recover, and launches a Thunder attack, only for Kingdra to shake it off as well. Ash is also confused by why Kingdra is easily repelling Pikachu's attacks, to which Clair replies that, though Kingdra is evolved from a Seadra, a Water type, upon evolution it gains the Dragon type as well. Kingdra continues the battle with Hydro Pump, which Pikachu returns fire with Thunderbolt.
Meanwhile, Jessie is lamenting the loss of Dratini, but is cheered up by the prospect of food. As Jessie is planning her revenge against Clair, the food meant to cheer her up is stolen from right under them. Though Wobbuffet notices this, and the others blame instantly blame him for eating the food after hearing a similar voice, which is actually a hidden Wynaut. However, they do manage to formulate a plan to steal the Dragon Fang.
Back at the Gym, Ash decides to switch out Pikachu after a Quick Attack also fails to faze Kingdra. Sending in Noctowl instead, Ash tries to use its Psychic abilities to try and land a blow against Kingdra. Elsewhere, Team Rocket manages to sneak in and steal the Dragon Fang from the Gym's treasure room without setting off its infrared alarms thanks to James’s Handy-Andy mechanical hand. However, an overzealous Wobbuffet manages to knock the group over, which subsequently breaks one of the sensor beams. As Ash’s match wages on, Noctowl temporarily immobilizes Kingdra with a Confusion attack. However, Kingdra aims a Hydro Pump at the wall to break the attack. Noctowl's Hypnosis also misses its mark thanks to Kingdra's Agility, and Kingdra lands a Hydro Pump on Noctowl, about to knock it out just as the burglar alarm sounded.
Everyone abandons the battle and rushes outside to see Team Rocket fleeing the crime scene with the Dragon Fang in hand. The Rocket trio commandeers a nearby boat and speeds off into the Dragon's Den, a cave filled with a confusing network of tunnels in the middle of the water. Clair and the others call out a flotilla of Pokémon and swim after the thieves. Her Dragonair's light and ability to sense changes in water currents help them to track Team Rocket, who find themselves in the Dragon Holy Land. The trio is saved from falling down from the waterfall into the Holy Land by a Dragonite, who Team Rocket convinces that they are trying to protect the Dragon Fang from Clair and the others. As Ash and his friends also manage to reach the Holy Land, they split up to look for Team Rocket. Upon arrival, the Dragonite fires a Hyper Beam as a warning shot at the group. Ash and his friends are surprised by the odd partnership. Dragonite goes onto pick the Rocket trio up and flies off with them. Kaburagi explains that the Dragonite had once belonged to the first Gym Leader of Blackthorn City, and had never felt the same since her Trainer had passed away. However, their thoughts are disturbed by a roar coming from a Pokémon flying towards them.