Agatha says to Evan, "Look around you...at a monument of human folly and selfishness." Evan questions this, and she begins to explain to him that the Power Plant they stand in was once intended to be a center of a major industrial development, but was abandoned halfway through. However, it caused hundreds of Pokémon to leave their homes for the convenience of humans. Large amounts of industrial waste were left behind from the Power Plant, which served as fuel for Gastly, Haunter, and Gengar. Agatha then reveals her identity to him as one of the Elite Four of Kanto. Blue begins to struggle inside the floating coffin, and Agatha laughs, stating that it is impossible to break free of the Dream Eater from the inside. She then commands her Gengar to drain all the life force from him. Blue is then shocked to a dream of his past.
In Blue's dream, he is being thrown onto the floor. A man stays silent as he watches Blue. Blue cries out in frustration, saying that if he were able to use his Pokémon things would be easier. He then pleads with the man, saying, "Master...Master! Please let me use my Pokémon!" After saying this, Blue demands to know why the Trainers themselves had to train if this was supposed to be Pokémon battling. The man begins to explain that Pokémon battling is only the Pokémon fighting and the Trainer merely giving orders. The Trainer suffers no injury at all. That is the reason why Trainers must train themselves. The Trainer's heart will never merge with their Pokémon's until they feel the attack and sharpen their own strengths. Then the man encourages Blue to grab the sword, hone his own strengths, and master the skills necessary to take down a foe himself.
Suddenly Blue wakes up, realizing he's under a Dream Eater attack by Gengar. He tries to think of a way to escape. Agatha smiles to herself as she enjoys Blue's pain, and exclaims that it was Evan's own bad luck to have come with Blue. Evan then yells in pain from an attack. He falls to the ground by the Pokédex. He looks at the Pokédex and realizes that Blue was talking to him through it. Blue warns Evan not to let Agatha know about Blue talking through the Pokédex and explains that Golduck is psychically channeling Blue's thoughts into the Pokédex. Blue tells Evan to go to the pile of Poké Balls and release his Haunter to attack Agatha's Gengar by surprise. Evan then cries out that he is unable to do it, being too scared. Blue then tells Evan that sometimes a Trainer must have the courage himself to take action. Agatha then reappears behind Evan as he closes the Pokédex, asking if he had any final words to say. She says that she knows about the trick with the Pokédex, even though she doesn't know what the two boys talked about. Then Agatha orders her Gengar to use Confuse Ray on Blue. Evan gasps and thinks to himself that it was all his fault, and musters determination within himself, clenching his fists. He begins to run at the pile of Poké Balls behind Agatha. Agatha takes this as an attack against her, and asks him if he was getting desperate. She then sends out Golbat and Arbok. Arbok manages to fling Evan to the pile of Poké Balls. Evan starts to look frantically for his Haunter, and finds it. He releases his Haunter to attack Gengar, and Agatha sneers, asking what a puny attack can do. She orders a Counter from Gengar.
Gengar and Haunter rush at each other to attack. Agatha chuckles and tells Gengar to use his full power to annihilate the Haunter and Evan screams encouragement to Haunter. Agatha wonders how long Evan will last. Suddenly the levitating coffin containing Blue begins to break and he begins to fall to the ground. Agatha wonders how the Dream Eater attack was weakened, and then recomposes herself, saying that Blue's Scyther's physical attack were no use against formless Pokémon. Blue then is reminded of what his master once told him, that even though there's no form, you can still slice through an enemy without form so long as you grasp the essence of the foe. Blue calls for a Slash from Scyther, slicing Gengar and Gastly to pieces. Evan rejoices. Agatha reappears from the mist, and says that indeed Blue is Professor Oak's grandson. Blue then asks what Agatha was to his grandfather, but she disappears in a swirl of mist. Blue grunts in frustration from her disappearance and lack of answers. Evan then spots Blue walking out and catches up to him. Blue then recounts to him of the time when he battled Gas Pokémon like this before, and how he was taken over, used as a puppet, and totally defenseless. Blue says that was his first time when he was finally able to wield the sword as if it were a part of him. He gives his Lapras to Evan, telling him to do what he likes with it. Blue then says good-bye to Evan.