Misty is riding her bike with Togepi in the basket. On her way to the Cerulean Gym, Misty sees a group of people staring at a big screen TV. A news reporter talks about a gym being shut down. 2 men known as the PIA come on the screen telling the people about how they'll shut down a gym. Then the screen shuts off.

A person in the crowd says that the PIA will be going to the Cerulean Gym next and Misty worries about this. She has a scary thought about the 2 men terrorizing the gym. Misty rushes down to the gym. Once she has disappeared, 3 other men known as Kim, Chan, and Chon appear. They find Misty to be familiar and they are from Team Rocket.

Misty finally makes it back to the gym. She calls out to see if anyone is in it and she hears some voices. The scene turns to a Gyarados jumping back and forth in the water. There are 5 other people there. 1 of the boys fall in the water and the Gyarados starts chasing him. Misty enters the pool arena and she sees the Gyarados chasing the boy. The other boys tell Misty that they are from the fan club of Daisy, Violet, and Lily. Them and Nurse Joy tells Misty that Gyarados has being going crazy for a few days. They suggest to return Gyarados back in its Pokéball but Nurse Joy tells Misty that it won't work. Misty sends out Politoed and Psyduck accidently gets sent out too. Psyduck falls in the water and starts to scream because it can't swim. Gyarados does a Headbutt on Psyduck and both the boy and Psyduck land on the ground again. The boys leave the gym making Misty and Nurse Joy do all the work.

They go to the bottom of the pool. Horsea and Starmie go up to them and Misty says hi. The Gyarados approaches Horsea and Starmie and they run away scared. Nurse Joy tells Misty that she has to think of something fast. Misty has a flashback of her being little. She goes inside a Gyarados's mouth and the Gyarados spits her out. The flashback ends and Misty tells Nurse Joy that she's been terrified of Gyarados ever since that day. Shin, Chan, and Rin are looking up from the window and they plan to mess Misty up.

Misty is now on a diving board and she's dressed up as a mermaid. She thinks that dancing with it will calm Gyarados down. Gyarados roars at her but Nurse Joy tells Misty to be brave. Misty dives into the water and she meets up with Gyarados. All the other water Pokémon surrounds Misty. Misty tells Horsea and Starmie to dance with her first. Gyarados watches Misty dance with the water Pokémon. Then it roars and starts to create a Whirlpool with Misty and the water Pokémon in it. Shin, Chan, and Rin are watching them and they plan to take over the place. Misty runs out of air but Horsea goes to bring Misty up to surface. Then Misty has a dream of Ash and Brock. They congratulate Misty of becoming a gym leader. Misty wakes up and Nurse Joy gives Misty some hot tea. Nurse Joy suggests that Misty separates the other Pokémon from Gyarados and Misty agrees.

Misty tries to return Gyarados back into its Pokéball but that doesn't work. So Misty puts Gyarados in a cage and Gyarados starts to hit the cage trying to escape. Gyarados shoots out a Hydro Pump and it splashes Misty and Nurse Joy. Suddenly, Kim appears on the diving board and is talking on a microphone. He challenges Misty to a battle and soon enough everyone from outside is hearing Kim talk. Everyone rushes in the gym to watch the Pokémon battle. They introduce themselves. Kim thinks that Misty is too scared to battle and the whole audience encourages Misty to battle.

That battle is about to start between Misty and Kim. Nurse Joy says the rules of the battle and then the battle begins. Misty sends out Staryu and Kim sends out Hitmonchan. Hitmonchan gasps for air because it can't breathe underwater. Misty tells Staryu to help Hitmonchan but Hitmonchan punches Staryu. Misty gets angry because Kim pulled off a sneak attack. Nurse Joy declares Staryu the winner because Hitmonchan did an illegal move. Misty then sends out Corsola and Kim sends out Tentacruel. Tentacruel starts the battle off with a Bubblebeam which hurts Corsola a lot. However, Corsola uses Recover and then a Tackle. Before Corsola hits Tentacruel, Chan and Chon send out their Tentacruel. One of the Tentacruels hits Corsola and Corsola falls against a rock. Nurse Joy says that they are violating the rules but Kim reminds them that Misty challenged all of them and not one. Misty thinks that Kim is too scared to battle by himself. This gets the 3 brothers mad and they order their Tentacruel to use Poison Sting. The attack hits Corsola hard and Misty dives into the water to save it. Nurse Joy bans and disqualifies the 3 brothers from battling with Pokémon again.

The 3 brothers then tell their Tentacruel to use Poison Sting on Gyarados. Misty dives down into the water again and this time she protects Gyarados from the attack by taking the hit herself. One of the Tentacruels uses Headbutt and hits Misty hard. Gyarados gets really mad now and with a few hits it breaks out of the cage. It jumps into the air with Misty on its head and jumps back into the water which splashes the 3 brothers. Kim tells his Tentacruel to use Bite but Gyarados attacks Tentacruel with its tail. Chan orders his Tentacruel to use Bubblebeam but Gyarados blocks the attack with Barrier. Chon tells his Tentacruel to use Hydro Pump but Misty tells Gyarados to use Hyper Beam. Gyarados uses Hyper Beam on the 3 Tentacruels and the Tentacruels blast right out of the gym. Then Misty orders Gyarados to use Hydro Pump and it blasts the 3 brothers right out of the gym as well.

Everyone cheers for Misty while Gyarados puts Misty back on the diving board. Misty puts Gyarados back into its Pokéball and then Nurse Joy comes up to congratulate Misty. Nurse Joy tells Misty that she has passed the inspection and she reveals herself as a PIA. Nurse Joy then begins for the Hoenn region and Misty waves goodbye to her. Lastly, we see Misty dive into the water and she is now the official Cerulean Gym leader.