In the beginning of this episode, Yugi is teaching Joey how to play Duel Monsters. Later they go to Yugi's grandfather's shop to see a rare Duel Monsters card. Yugi's grandfather show them the rare Blue Eyes White Dragon. Seto Kaiba walks in and can't believe it when he sees so rare a card in the shop. He offers to give anything for it, but Yugi's grandfather refuses. Later Seto Kaiba duels Yugi's grandfather for the card. Kaiba wins, and Yugi's grandfather has to be rushed to the hospital. He gives his deck to Yugi, and then Yugi duels Kaiba. Kaiba was winning until Yugi summons the Forbidden One (Exodia), something that has never been done before. Kaiba is crushed by his defeat.
Joey ends up in 8th place in the regional championships. Yugi watches Weevil beat Rex raptor. Later Yugi battle Pegasus, but there was a time limit. Just when Yugi was going to win, time ran out, and Pegasus won. Pegasus stole Yugi's Grandpa's soul. Now Yugi has go to the Duelist Kingdom and battle in a tournament so he can save his grandpa.
Joey gets a letter from his sister, Serenity. It says she was going blind. Joey is going with Yugi to the Duelist Kingdom to try and win the prize money for his sister. Yugi has to give Joey a star chip so he can board the ship. Now they each only have one. Tea and Tristan sneak onto the ship. Weevil asks to see the legendary Exodia cards. Yugi shows them to him and Weevil throws them overboard. Joey jumps in to try and save them, but doesn't succeed.
They arrive at the Duelist Kingdom and Pegasus explains the rules to them. The people who have 10 star chips can move on to the finals. Yugi challenges Weevil to a duel. Weevil uses mostly bug type creatures and Yugi uses electricity and water to defeat them. Now Yugi has 3 star chips.
Mai challenges Joey to a duel. Joey accepts. Joey uses his time wizard to make his baby dragon an ultimate dragon and it also made Mai's harpie ladies old. Joey won.
Everyone was really hungry. They saw some fish cooking. Tsunami, a duelist, let's them eat the fish and but challenges Yugi to a duel. The playing field was half ocean. Yugi eventually won by using a moon card and then destroying it to change the tides and dry up Tsunami's water monsters. Yugi won.
Pegasus wants to take over KaibaCorp. In order to do so, he must get rid of Seto Kaiba and kidnap Mokuba. When they try to get Seto Kaiba, he jumps out a window and falls a long way. They think he's dead. Meanwhile, Mokuba escaped and challenged Yugi to a duel. Yugi talked some sense into him and convince Mokuba that they all need to unite against Pegasus. But in the process, Mokuba loses some of Yugi's star chips. Pegasus sends a fake Kaiba out to duel Yugi.