An explosion occurs in a Team Rocket laboratory and Mewtwo escapes, but all of it was simply a flashback of events in Blaine's nightmare. Feeling pain in his right arm, the scientist looks towards Cerulean City's northwestern sector, before continuing on his way on Rapidash's back.
At the Pokémon Center, Red is informed by Bill of a "beast" that had attacked the northwest sector of Cerulean City, before disappearing into Cerulean Cave. Despite Bill's warning to stay away, Red admits to himself he had already reached that city. Entering the desolate sector, Red walks around while muttering the beast's description to himself, noticing that the nearby trees weren't crushed or burned, but rather twisted.
Reaching the opening of Cerulean Cave, Red is startled to see that all of his Pokémon are in states of unease, until a sudden tornado catches them all. Through quick thinking, Red manages to have all his Pokémon hold onto each other, but his Aero is unable to fly away with everyone against the tornado's power. With his Poké Balls blown away, Red is unable to withdraw the Pokémon and they soon blow away as well, but Red is quickly handed new Poké Balls from a mysterious person. As he recaptures all his Pokémon, the mysterious person reveals himself to be Blaine, who had rescued Red on his Rapidash.
Blaine declares his purpose: to defeat the monster of Cerulean City creating the impregnable tornado, and to prove his point, he has Rapidash use Fire Spin, which is bounced back by the tornado. Explaining that the tornado appears to be a powerful Psywave that swirls outward in order to repel any attack thrown at it, Blaine reveals the beast as Mewtwo. As Mewtwo disappears to attack the pair from behind, Blaine uncovers his mutated arm and tracks it. To Red's horror, Blaine delves into Mewtwo's history: due to an insufficient amount of cells from Mew to form a new creature, Blaine was forced to inject cells from his own arm to complete Mewtwo. In the process, however, some of Mewtwo's cells found their way into Blaine, thus mutating his arm, which over time will spread through his body and eventually kill him. At the same time, the shared cells also allow Blaine to track Mewtwo down, marking him as the only one who could deal with Mewtwo.
Declaring his fearless resolve in spite of Team Rocket hunting him down, Blaine has Rapidash trap Red in a fireball wall for his safety, before charging into the tornado on Rapidash amidst Red's protest.