Satoshi is using a computer in the Cerulean City Pokémon Center when an "ERROR" screen appears on the monitor. The attendant at the Pokémon Center tells Satoshi to see Bill about the computer's problem. When Satoshi reaches his house, he sees a talking Nidoran♂ getting the mail. It looks different from the other Nidoran he's seen, so Satoshi decides to catch it. He catches it and checks his Pokédex for data. Then Satoshi realizes that the Nidoran he caught was Bill. Satoshi goes into the house and places Bill into a machine which separates the Nidoran part of him from the human part of him. Later on, Bill introduces himself and shows Satoshi the three evolutions of Eevee. He then tells Satoshi how he got turned into Nidoran♂. Then Bill gives Satoshi a ticket to the S.S. Anne for saving him and promises to do a system check of the computer to find the problem.
On the S.S. Anne, Satoshi runs into Shigeru and is challenged to a battle. Satoshi tells Charmander to scratch Shigeru's Squirtle, but it uses its shell to block the attack. Then Satoshi wins the battle after defeating Squirtle. Just then, Charmander starts to glow and evolves into Charmeleon! Shigeru is disappointed because they had left at the same time but one of Satoshi's Pokémon evolved first. Satoshi and Charmeleon look around the ship until they hear a noise coming from the captain's room. The captain opens the door and yells out for a bucket. Satoshi grabs an empty cleaning bucket and gives it to the captain, who proceeds to close the door and gets seasick.
In Vermilion City, Satoshi spots a Pokémon Fan Club. The Pokémon Fan Club Chairman talks on and on about Pokémon until he finally reveals that he knows nothing of the Vermilion City Gym Leader, Lt. Surge. Satoshi finds the Gym, and meets the Gym Leader Lt. Surge and they have a battle, so Satoshi sends out Charmeleon while Lt. Surge uses Electabuzz. Charmeleon is backed into a corner when dodging Electabuzz's attacks and gets an idea. It topples over one of the stakes holding the barbed-wire fence surrounding the arena and uses it to tie Electabuzz up. Electabuzz is then defeated by Charmeleon. Happy, Lt. Surge gives Satoshi the Thunder Badge and the captain gives him HM01 (Cut).