Ruby speaks to her mother at her grave before she joins the rest of team RWBY to face their first round of the Vytal Festival tournament. Professor Port and Doctor Oobleck are the announcers for the tournament and they explain the rules. There are three rounds: teams, doubles, and singles. The winners of the teams round will pick two members to represent them in the doubles round, and then one is selected for the singles round. The remaining combatants will then fight until one is the champion. After a difficult but successful match with team ABRN from Haven, team RWBY goes to the festival fair grounds for lunch. Weiss receives a call from her father, but she intentionally ignores it. Before lunch, they meet Emerald and Mercury, with Emerald continuing to play the nice girl to get to know the team better, despite her true dislike of them. After learning that the next match will be fought by Yang and Weiss, the two leave, using Mercury's social awkwardness as an excuse. The team goes to the shopkeeper's noodle stand to buy lunch, but when Weiss proceeds to pay, her credit card is declined. Pyrrha covers lunch, which they all enjoy, though it leaves Weiss and Jaune with upset stomachs. Then team JNPR heads for the arena for their match against team BRNZ of Shade, with team RWBY, Cinder, Mercury and Emerald watching in the audience.

Team JNPR's fight with team BRNZ proves to be a challenge when the female sniper attacks from the woods. But after a long and difficult battle, during which JNPR argues over team attack names in the middle of the fight, Nora showcases her semblance of channeling electricity to her muscles and claims victory for her team by smashing team BRNZ out of the ring. The next match is team SSSN of Haven vs. team NDGO of Shade. When one half of the terrain is shown to be the ocean, Neptune begins to panic as he is afraid of water. As team NDGO gains the upper hand, Sun eventually gets Neptune to help by electrifying the ocean with his weapon, shocking team NDGO who are in the water and winning the match for team SSSN. At a bar, Qrow Branwen is seen watching the tournament matches while drinking heavily. He is unimpressed by the battles fought by teams JNPR and SSSN. When the bartender asks what battle is he in Vytal for, he points to a passing airship outside and leaves the bar. As team RWBY leaves the coliseum, Weiss spots the airship and says, "She's here..."

Weiss and Ruby meet the occupant of the airship, Weiss' older sister Winter Schnee. Although she refuses to explain why she is at the festival or for how long, she does spend some time with Weiss. As the two attempt to leave, they are accosted by Qrow, who provokes Winter into a fight in the courtyard. During the fight, a passing Mercury sees Qrow, much to his horror. The fight eventually is interrupted by the arrival of General Ironwood and Professors Ozpin and Goodwitch, who rebuke the two of them. The group then retreats to Ozpin's office, where they discuss the imminent threat of Cinder and her group. Qrow reveals that the enemy has infiltrated the festival, and expresses concerns about Ironwood's show of military force, believing that they will only cause people to worry about what kind of enemy such an army would need to fight. Meanwhile, Mercury reveals Qrow's arrival to Cinder, but she is unconcerned, believing that they retain the advantage of anonymity. She hacks the tournament computer systems, placing Emerald and Mercury in the next fight against team CFVY members Coco Adel and Yatsuhashi Daichi.

The match between Emerald and Mercury versus Coco and Yatsuhashi commences, but the two team CFVY members are easily defeated. Afterwards, Weiss and Winter are eating together, and Winter teaches Weiss how to use Summoning in her Glyphs, as it is a hereditary Semblance passed down in the Schnee family. Meanwhile, Qrow spends time with his nieces, playing video games and sharing stories of his adventures with them. He then notes how ever since Torchwick was arrested, violence and crime has completely stopped, making him suspicious. He then shows Ruby and Yang a picture of his former team, STRQ, and to always keep learning if they want to succeed as Huntresses. Yang takes a particularly close look as one of the people in the picture looks remarkably like the woman who saved her from Neopolitan on the train, with Qrow trying to cover the face up with his thumb. Meanwhile, Weiss has difficulty with her Summoning, and Winter tells her that she's been in a similar situation of being cut off from her father. She then tells Weiss that she can continue to rely on her father and his money, or she can explore Remnant on her own and forge her own path. As the two bid farewell and leave, they are unaware that Weiss managed to summon a small version of the sword of the armored knight that Weiss fought in the "White" Trailer. That night, as Winter departs, Weiss again rejects a call from her father.

Penny Polendina and her teammate, Ciel Soleil, defeat Russel Thrush and Sky Lark of Team CRDL, allowing them to move forward in the tournament. Ruby goes to congratulate Penny, during which she says to Ruby that she wants to stay at Beacon. The next match is Weiss and Yang vs Flynt Coal and Neon Katt of Team FNKI from Atlas. Flynt Coal uses a trumpet capable of creating powerful shockwaves, whereas Neon Katt uses a mixture of roller-blades and nunchucks. Both Flynt and Neon engage in some pre-battle smacktalk, in hopes of making Weiss and Yang too peeved to concentrate properly. Flynt criticizes Weiss' father's Dust company for running his father's independent company into the ground, while Neon eggs Yang for the way she talks and her top-heavy figure. During the match, Weiss and Yang initially get overwhelmed by Flynt and Neon's attacks, but Weiss sacrifices herself to save Yang, allowing Team RWBY to win the battle. After the match, Flynt and Neon stop their criticisms and now congratulate the two for a match well fought. Later on, Cinder finds out about Penny being a robot and decides to make a little change to their plan. Meanwhile, Qrow asks Ozpin if he found his "Guardian", and Ozpin replies that he has found a candidate who's "ready". At the same time, Pyrrha is seen presumably heading to Ozpin's office.

Pyrrha is summoned to Ozpin's office and meets him, Qrow, Glynda, and Ironwood. Ozpin has her recount a fairy tale called "The Story of the Seasons", where four women befriended an old man and were granted power over the seasons in return. He explains that this tale is true and that his group wishes for her to inherit the powers of the Fall Maiden; the powers are transferred to the last person on a dying Maiden's thoughts, unless that person is a man or too old to receive the power, in which case it goes to someone random. Pyrrha is taken to a secret underground vault, where the current Fall Maiden, Amber, lies comatose; Ozpin reveals that she was recently attacked and a portion of her powers stolen. Since there is a risk of the Maiden's powers seeking to reunite itself or for her last thoughts to be on her assailant, Ozpin intends to use Atlas technology to artificially transfer Amber's Aura to Pyrrha, which is highly experimental. There is no guarantee that the process will work, nor if Pyrrha will be the same person if it does, as her and Amber's lives will be intertwined. He tells her to take some time to make the decision. Meanwhile, the one-on-one round of the tournament begins, and Yang and Mercury are chosen for the first fight. Mercury initially gets the upper hand, but an enraged Yang activates her Semblance and defeats him. As Yang turns to leave, Mercury attacks her from behind, and Yang breaks his leg. However, several Atlas robots converge to arrest Yang, and she sees the giant video screen nearby showing a replay of her attacking him unprovoked, much to Yang's surprise, the crowd's ire, and her teammates' horror. Yang complies with the Atlas soldiers, though she is frightened and confused. As a result of all of this, the Grimm surrounding Vale turn towards Amity Stadium.

In the past, Cinder recruits Emerald and Mercury after being impressed with their abilities. Later, the three of them offer to make a deal with White Fang leader, Adam Taurus, but he refuses. Some time afterwards, Cinder, Emerald, and Mercury ambush and attack Amber, the Fall Maiden. Initially, Amber overwhelms them with her powers and fighting prowess, but Cinder manages to get the better of her. After defeating Amber, Cinder begins extracting her powers, but Qrow arrives, forcing the three to retreat. Afterwards, Cinder returns to Adam with Dust and Lien, shows off her new powers to him, and offers him a new deal. In the present day, medics rush Mercury out of Amity Colloseum after getting his leg broken. Cinder then takes her henchmen back to their hideout, where it was revealed that they intended to frame Yang using Emerald's illusion Semblance and Mercury's prosthetic legs to their advantage. Cinder and Emerald then tell Mercury to lay low as they go off to watch the next match.

As a result of the incident after the match, Yang and Team RWBY are disqualified from the tournament. Yang's teammates and Team JNPR declare their support for Yang, although Blake remains conflicted; she reveals that a man she once knew changed from a kind person to a cold-hearted one in a situation similar to Yang, before similarly deciding to trust her. After they leave, Qrow arrives, having come to the conclusion that Yang suffered from a stress-induced hallucination. He confirms that Yang's mother was the one to save her during her fight with Neo and that she has no intention of doing so again. Qrow then offers to help her track her down. Meanwhile, Jaune finds Pyrrha in distress over Ozpin's request, and she asks him if he believes in destiny. She explains that she considers destiny to be an overarching goal one works towards their whole life, and that she has been offered a chance to fulfill her destiny to be a Huntress and save the world immediately at the cost of who she is. Jaune advises Pyrrha not to let anything get between her and her destiny, driving her to tears; she accidentally assaults Jaune, apologizes, and flees. Ruby encounters Velvet practicing her photography, and Velvet expresses her sympathy for Yang; she reveals that Coco also had a hallucination of Yatsuhashi during their fight with Emerald and Mercury. Suspicious, Ruby attends the next match between Pyrrha and Penny, where she sees Emerald in attendance. Ruby sneaks under the arena and encounters a fully mobile Mercury; she prepares to battle him, despite having left her weapon behind.

The match between Pyrrha and Penny begins, with both of their respective headmasters observing this time. Meanwhile, Ruby attempts to flee from Mercury, but he prevents her from doing so. During the match, Emerald casts her Semblance on Pyrrha, causing her to hallucinate Penny summoning hundreds of her swords. Pyrrha then uses her Semblance to deflect them all, but the wires attached to the swords start to coil around Penny's torso and arm, causing her to be brutally ripped apart. Everyone in the colosseum is horrified of the events that took place, and Cinder broadcasts a message saying this is what happens when people place their trust in the Kingdoms and the Huntsmen Academies. Meanwhile, massive hordes of Grimm start to make their way to Beacon. Neo breaks Torchwick out of prison, and he cripples Atlas' air force. The White Fang led by Adam also arrive with Grimm in tow.

As Grimm begin attacking Beacon from everywhere, Blake and Weiss contact Yang, who tells them that the White Fang have arrived as well. At Amity Colosseum, a Nevermore penetrates the protective barrier above the stadium and attempts to kill Pyrrha, who was still traumatized of what she did to Penny. Ruby then comes to her rescue, and Teams JNPR, SSSN, CFVY, ABRN, and FNKI all unite to take down the Nevermore. Pyrrha apologizes to Ruby about what happened to Penny, but Ruby says that it wasn't her fault, and Jaune says that whoever broadcast the message were responsible for everything that was going on. The students then reach Ironwood, who tells them that they can either stay and defend their school and kingdom, or try to save themselves. Meanwhile, Torchwick begins uploading Cinder's virus aboard the Atlesian Airships, seizing control of Atlas' robots and turning them against their human allies. Ruby notices Ironwood's ship go down when the robots turn against him, and heads for the main Atlesian Airship to stop Torchwick. Blake and Weiss split up to fight more enemies, and the former then encounters Adam. Meanwhile, Cinder's trio watches the chaos from the rooftop, with Emerald potentially showing signs of remorse. As the fight continues to escalate, a giant Grimm Dragon suddenly appears, spawning more Grimm onto the battlefield. Pyrrha then decides to go and see Ozpin, while Jaune follows her.

As the battle rages on, the students evetually start to get overwhelmed by the infected Atlesian Paladins. Coco allows Velvet to use her weapon, in which she conjures holographic copies of the other students weapons. Weiss arrives at the scene, and she manages to use her Glyphs to summon the Knight's arm and sword to help take down the Paladins, but it exhausts her. Meanwhile, Ruby engages Neo and Torchwick aboard the airship, in which she manages to catch Neo off guard and make her fly off the ship, but Torchwick gets devoured by a Griffon and the airship starts to crash towards Vale. Elsewhere, Blake and Adam have their duel, but Blake gets overwhelmed by him. Yang arrives to help Blake, but Adam slices her arm off, and Blake and Yang are forced to retreat. In the Beacon Vault, Ozpin starts the transfer process in order for Pyrrha to gain Amber's Maiden powers. Suddenly, Cinder arrives and kills Amber before the process could be complete, and she gains the full Fall Maiden's powers. Ozpin tells Pyrrha and Jaune to leave, while he stays behind to take on Cinder alone. Cinder comments that Ozpin is as arrogant as 'she' said, suggesting there is someone else on Cinder's team who knows Ozpin personally.

As Cinder and Ozpin duel in the Vault, a mandatory evacuation from Beacon starts to take place. Sun tells Ruby that they need to go because of the Dragon, but Nora and Ren say that Jaune and Pyrrha are still in the school. Ruby and Weiss decide to go and find them. Meanwhile, Jaune and Pyrrha notice Cinder getting to the highest point of the tower. Pyrrha kisses Jaune before pushing him into a nearby rocket locker which sends him to safety. She then goes to duel Cinder, but Cinder defeats her. Ruby arrives just in time to witness Cinder stab and disintegrate Pyrrha, causing Ruby to fly into a rage and summon a powerful bright light that blasts a surprised Cinder and the entire area. Some time later, Ruby wakes up with her father, Taiyang, at her bedside, who reveals that both her and Yang are fine, but that the Dragon has been frozen by her power and that Beacon has been overrun with Grimm. Qrow then speaks to her alone and talks about her silver eyes, which are a rare trait to have as they are born to lead the life of a warrior, and that Grimm fear the presence of silver-eyed warriors. Qrow then says that Ozpin went missing ever since Beacon fell, and that his only lead is that their enemies came from Haven. Ruby then visits a despondent Yang, who tells her that Weiss is heading back to Atlas with her father, and Blake is on the run. Moreover, with the CCT in Vale down, distrust between the kingdoms is becoming more prevalent. That winter, Ruby decides to go to Haven accompanied by Jaune, Nora, and Ren. In the epilogue of the episode, a woman named Salem reveals herself as the true mastermind of the events that transpired, and vows to take down Ozpin. In a post credits scene, Qrow watches Ruby with her friends walking. Holding Ozpin's cane, Qrow jumps from a nearby cliff and a crow takes his place, flying off with Ruby and her friends.