Ash and his friends' aimless journey has brought them to Vermilion City. Overhearing some children talking about a show, the group decides to go see it, especially once they see a poster that showcases the Squirtle Squad, with Ash's Squirtle leading them. Ash calls out his Bulbasaur and Charizard, who are also excited of the chance to get to see their old friend again. Unbeknownst to the group, the Squirtle Squad is now managed by Team Rocket, who are seeking to profit from the firefighter crew's fame by selling Squirtle Squad-themed merchandise. Once the show starts, Jessie and James play the pyromaniac villains while Meowth remotely ignites some controlled fires on the stage, prompting the Squirtle Squad, dressed in superhero costumes, to appear and start spraying water on the fire. Ash cheers for them from the audience, which his Squirtle notices, being happy to see its Trainer again. With the fire extinguished and the villains defeated, Jessie and James switch back to their manager uniforms and start letting children on the stage to meet and greet the Squirtle Squad. As Squirtle poses for photos and greets its fans, it keeps looking for Ash, but fails to spot him. Ash and his friends do join the queue, but by the time they'd be next in line, all the merchandise has been sold out and Team Rocket declares the handshake session is over. Dismayed, Ash and his friends leave. Their departure is noticed by Squirtle, who feels let down by its friends not coming to greet it.
Team Rocket and the Squirtle Squad move to a hotel to eat after a successful show, though Ash's Squirtle is feeling grumpy due its friends seemingly not caring about it. Ash and his friends also arrive at the hotel and try to go greet Squirtle, but Team Rocket, thinking Ash has come to take his Squirtle away, blocks their way. Bulbasaur and Charizard try to greet Squirtle, only for it to grumpily dismiss their greetings. Charizard responds by scorching the Squirtle Squad with Flamethrower, angering Squirtle even more and causing it to attack back. Ash tries to calm the situation down, but only gets caught in the crossfire of moves. Eventually, Pikachu feels he's had enough and shocks everyone nearby, causing Bulbasaur and Charizard to storm off and forcing the group to follow them, even if they still don't understand why Squirtle is acting so cold towards them. Both Ash and his Squirtle are left upset that they've parted on bad terms. Figuring that Pikachu was weakened after being caught in the crossfire, Team Rocket decides to use the opportunity to try to nab him.
Ash's team members for this episode
The group stops by at a café to eat, with Ash's attempts to have Bulbasaur and Charizard consider reconciling with Squirtle ending in failure. Hiding nearby, Team Rocket tries to fire a net at Pikachu, only for a gust of wind to blow it onto a Hariyama instead. Ticked off by this, Hariyama flings them into the air. After a brief blastoff, the trio lands on a Camerupt, which sends them blasting off for a second time. Meanwhile, Brock sees an Officer Jenny accepting a person's request to look for his missing Venonat and rushes to flirt with her, but his moment of romance is cut off by a Poison Jab from Croagunk and Misty dragging him away by the ear.
In the city's warehouse district, Team Rocket's net has landed on a piece of exposed wire, soon causing it and the nearby warehouse to catch fire. Hearing the hotel workers talking about the fire, the Squirtle Squad rushes to the site and starts using Water Gun on the flames. Arriving on the scene, Ash and his friends help out, too, with Brock assisting Officer Jenny in keeping the nearby crowd under control, Misty using her Psyduck, Politoed, and Clauncher to fight the flames, and Ash using a hose to spray water on the fire as well. Receiving encouragements from Ash, the Squirtle Squad abandons their superhero costumes and dons their usual firefighter jackets before redoubling their efforts. A gust of wind blows the flames towards a neighboring warehouse, which also starts catching fire, so the firefighters focus their attention to it to keep the flames from spreading. Seeing how hard Squirtle is working, Bulbasaur and Charizard also join in, stopping the fire from spreading onto the nearby trees. Just as the situation seems to be getting under control, someone spots a group of Pokémon, including the missing Venonat, on the burning warehouse's rooftop. As such, Ash has Bulbasaur and Squirtle ride Charizard to the rooftop's level, with Squirtle putting out the flames near the trapped Pokémon and Bulbasaur lifting them to safety with Vine Whip. Ash's heroic efforts earn him attention from the crowd, with some children even recognizing him.
Eventually, the fire is put out, and Ash happily hugs his Squirtle, the reason why his Pokémon were fighting earlier not mattering to him anymore. Surprisingly, a second Officer Jenny shows up, revealing that the "managers" had actually taken the Squirtle Squad with them without permission and declaring that the profits from the sold merchandise will be donated to the city and used to rebuild the warehouses. As the Squirtle Squad prepares to depart, Ash expresses his hope to get to battle together with Squirtle again one day, and his partner shares one more hug with him before leaving. A group of fans then rushes over, but instead of the Squirtle Squad, they're now after Ash, having recognized him as a Champion, and surround him, Brock, and Misty in an excited mob.
The final scene where Squirtle removes its sunglasses and leaps into Ash's arms is reminiscent of Here Comes the Squirtle Squad when Squirtle did the same thing to let Ash know it wanted to join his team.