At Iki Town, a festive ambience fills the air as preparations are underway for the grand Z-Festival. Making his way around on Tauros in his Riding Gear, Sun the Courier seeks out his customers one by one, and distributes his long cart of goods, most of which are market stalls for the event. He locates the last two customers on his list, Matt of Café Space and Julie of the Malasada Shop, and gets them to sign off the receipts after delivering the goods they ordered. He then concludes his delivery service, in other words earnings of the day, and pouts a little as he deactivates the Ride Pager to send Tauros off and revert back to his own clothes.

Moon approaches Sun, and congratulates him for making a big profit. However, Sun is apparently less than thrilled, and responds with a half-hearted shrug. Moon wonders why his gain failed to cheer him, and Sun reveals that he has actually turned down many requests, which markedly reduced the amount he could have earned. He still couldn't understand why Prof. Kukui has forced him to take part in the Z Battle Tournament, which he will gain zero profit from, and Moon believes that it is his punishment for dirtying the Pokedex and failing to report about the Tapu. Sun bolts in shock that Moon knows about the deal with Tapu, and Moon explains how she saw Kukui cursing out when he discovered that Sun didn't tell him about the encounter.

Moon thinks the Tapu must be some kind of special Pokemon, and wishes to know more about it. She wonders where the professor has gone, and Sun says he doesn't know. He postulates that he may have gone to the harbor to pick up his wife who is coming for the festival, and at that moment, someone with a market stall barks at Sun and Moon for blocking their way. The two young ones turn around, and Moon sees that it is the two Team Skull Grunts they encountered the day before. The male Grunt instantly recognizes the kids, and feels pleased that they are crossing paths so soon again. He knows their Boss has asked for a direct notification when they locate the boy, but feels that he should be capable of setting the record straight on his own. The female Grunt agrees that they could handle things themselves, and tells her companion to teach the kid a good lesson. However, Sun wears a baffled look, and seems to have no idea who the Grunts are, causing the male Grunt to collapse with shock.

Moon reminds Sun that they were the rogues who tried to cheat him in the Pyukumuku-chucking job yesterday, and the boy lets out a snicker of realization, apparently not having bothered to remember the encounter. His lack of concern greatly upsets the male Grunt, who feels insulted that the incident plagued him so much when it hardly mattered to the boy. Without warning, he calls forth his Pyukumuku to attack, and Sun narrowly dodges the strike by hopping backwards. Sun sends out En and Dollar to fight back, but as soon as they meet, they start clawing at one another, and Sun feels frustrated while Moon sighs that he should have anticipated this outcome.

Suddenly, En and Dollar are separated from one another by two giant paws, and a foot stomps on Pyukumuku to immobilize it. It turns out that Hala has come to intercept the fight, and his Bewear easily keeps the three Pokemon apart with its mighty strength. The Melemele Kahuna introduces himself formally, and commends the trainers for their liveliness. However, he thinks they should reserve it for the Z Battle Tournament, and acknowledges Sun by addressing his name. The boy is surprised that the Kahuna knows him personally, and Hala explains that he has heard much about him from Kukui. The old man then turns to the male Grunt, wanting to know if he really wants to go by just Grunt A, and the man nods with a bit of embarrassment. Hala explains that the battle will commence at sunset, and wants the contestants to stay in the waiting rooms at the meantime. Grunt A decides to leave the Grilled Slowpoke Tail stall to the female Grunt's care, and Moon wishes Sun good luck as the boy climbs into his tent. With all preparations in place, Hala steps onto the stage to address the big crowd that has gathered, and announces that the Z Festival which is dedicated to the Tapus shall start.

Soon, Iki Town buzzes with cheers and laughter, and visitors from across the region fill the streets that are usually scarce with population. People and their Pokemon enjoy the variety of goodies the market stalls have to offer, and the festive ambience is further heightened by the traditional dance performed by three Alolan Marowaks on stage. Moon walks around with Rowlet, and is pleasantly surprised by how lively the festival is. She realizes that Sun is going to battle in front of this huge crowd, and notices the six waiting rooms, which implies that there are six contestants in the tournament. She wonders what other trainers are participating, and her words are overheard by Olivia, who is on her way to deliver Malasadas to the contestants with her Lycanroc. She recognizes the girl as a friend of Sun's, and Moon introduces herself but denies being a friend of the boy. Olivia reveals that she is the Island Kahuna of Akala, and suggests Moon help her out so that she may see her friend. Moon agrees to lend a hand, but once again declares not being a friend of Sun's, causing Olivia to giggle and squeal at her innocence. Wearing an unamused look, Moon fails to see Olivia's excitement, and the Akala Kahuna recalls with a blush that she used to pretend not being interested in boys as well when she was her age.

Not intending to fuel Olivia's uncanny behavior, Moon keeps her mouth shut, and follows the young woman as they enter the waiting rooms to offer Malasadas. Grunt A in the first room picks a Malasada with the number 6 on its package, and Olivia wants Moon to write it down on a board. Moon realizes that they are determining the random match-ups by using the package number on the Malasadas, and sees from the chart that contestants 1 and 6 can skip to the second round directly. Olivia brings them to the next room, and Moon cringes when she sees a topless man with a mask doing squats. From his appearance, Moon guesses that he is some kind of pro-wrestler, and wonders if he plans to fight in place of his Pokemon. She learns that the man calls himself the Masked Royal, and puts his name on slot 4 after he picks the package with the number. Moving onto the next room, Olivia greets the contestant Hau, but the boy goes frantic as soon as he sees the basket of Malasadas. He promptly dives in to reach for his favourite food, and Olivia has to fight him off to make sure he only gets one, which is numbered 3. As the boy sits back to enjoy the Malasada, Olivia quickly ushers Moon out of the room, fearing that the boy would come for the rest after he finishes his share.

In the next room, Moon meets Sun, who is playing with his abacus, and tells him to take a Malasada. She still addresses him as Mr. Courier, and Sun is happy to know that the food is for free. Moon puts Sun's name in slot 5 from his pick, and sees that he will fight the Masked Royal in his first match. She then follows Olivia to the next contestant's room, but surprisingly finds it empty with a note left on the chair. The note states that the contestant shall return before the battle begins, and Olivia wonders if he or she has gone off to the bathroom. She decides to skip this room for now, and enters the last one, only to hear a startled squeal as soon as she enters the tent. Moon wonders what is going on, and sees that the last contestant is a blonde girl with a white hat who appears to be quite scared for some reason. Since the contestants so far have been rather peculiar, she doesn't make too much out of it, and walks up to the girl to offer her a Malasada. However, the girl pulls back anxiously, and Moon wants to know if she is really one of the contestants. The girl stammers that she is, but also isn't, and states that she has never taken part in a Pokemon battle before. In fact, she cannot stand to see Pokemon hurt each other in a battle, and Moon snickers why she has signed herself up in that case.

Before the blonde girl could explain, her bagpack is unzipped from the inside, and a gaseous Pokemon resembling a miniature nebula emerges from it before dashing out of the room abruptly. The blonde girl cries out in horror after the creature, calling it Nebby, and runs out of the tent herself, heading north towards the Mahalo Trail. Moon finds the situation unsettling, and decides to go after the girl to see what is going on. Olivia promises to join her once she informs Hala, and Moon begins to give chase on the long and winded mountainous trail. As she approaches its end, something in the sky catches her attention, and she looks up to find what appears to be some kind of crevice surrounded by a swirl of black clouds. Rowlet tilts its head sideways to stare at the anomaly, and Moon wonders what it could be. At that moment, her thought is interrupted by a scream, and Moon hurries forward to see the blonde girl standing before a wooden footbridge, where the nebula-like Pokemon is attacked by three wild Spearows.

Moon urges the blonde girl to help the Pokemon by battling the Spearows, but the blonde girl stutters and says it is out of her capacity. Left with no choice, Moon orders Rowlet to ward off the wild birds, and runs onto the bridge herself to shield Nebby. Unfortunately, Rowlet alone is unable to deal with three opponents, and one Spearow lashes out its claws at Moon, dealing a big scratch on her shoulder. Seeing that, Nebby gets upset and begins to glow intensely. In the next instant, it creates a huge explosion, shattering the footbridge and causes Moon to plummet while still holding the nebula Pokemon in her arms. The blonde girl cries out in horror, but before Moon falls to her demise, the mysterious orange and yellow Pokemon that resembles a rooster suddenly materializes from the sky, and swoops down to carry the girl to safety. It then leaves as abruptly as it came, and Olivia arrives just in time to witness the scene, recognizing the Pokemon as no other than Tapu Koko.

The Akala Kahuna rushes towards Moon to check on her, and the girl assures her that she is alright, despite being astonished that the same Pokemon saved her today when it attacked her yesterday. She brings Nebby back to the blonde girl, and suggests she train her treasured Pokemon to be able to protect itself if she cannot do so. The blonde girl thanks her wholeheartedly, and introduces herself as Lillie, who is currently under the care of Prof. Kukui's wife. Moon realizes with a start that she must have been enrolled into the tournament by the professor, but Lillie states that there has actually been a misunderstanding .She explains how Nebby thrashed around and dragged her near the registration counter, and the staff inadvertently mistook her as a prospective contestant. Hearing that, Olivia relents that they shall get her registration cancelled, but Moon thinks it would cause a lot of trouble since their current match-up chart is built on a six-contestant basis. She offers to take Lillie's place in the tournament if the judges allow, and the blonde girl is astonished by her kindness.

Later, the sun begins to set, and Hala calls upon the contestants from their waiting rooms. Grunt A, the Masked Royal, Sun, Hau and Moon stand in line next to one another, and Hala soon realizes that one participant is missing. At that moment, the contestant who left the note on the chair, who is a blonde boy with jagged hair named Gladion, shows up with a quadruple Pokemon that wears a metallic helmet, and apologizes for returning late. He explains that his Type: Null noticed a crack in the sky, which concerned it so much that he had to check it out. Moon bolts with a start that the blonde boy must be talking about the anomaly she saw earlier, and wishes to ask him about it. However, before she could raise her question, Sun drags her off to line up in front of the stage as Hala instructed, and the Melemele Kahuna proceeds to explain the rules of the tournament. He states that each contestant is allowed to use two Pokemon, and he, together with Samson Oak, the top Pokemon authority in Alola, shall be the judges. The crowd cheers at the presence of Samson Oak, and Hala calls forth Sun and the Masked Royal to get on stage for the first match. Waving his fan, the old man officially inaugurates the Z Battle Tournament dedicated to the Tapus, and the Masked Royal proceeds to send out his Rockruff while Sun does the same nonchalantly with En.

Meanwhile, at Prof. Kukui's Science Lab, which is also his home, his wife Prof. Burnet tries her best to pacify Lillie, who has been crying and apologizing for all the trouble she has caused. Burnet assures her that everything will be alright, and wants to know if the girl has seen her husband. Lillie replies that she doesn't recall seeing the professor at the festival, and Burnet decides to drop the matter and let the girl have some rest. She climbs down the wooden ladder that leads off from the small attic where Lillie sleeps, and retreats to the living room where she plops herself down on the sofa to watch TV.

Lillie feels bad for keeping Burnet in the house since she knows how much the woman yearns to watch the Z Battle Tournament in person, but Burnet says it doesn't matter since they are having live broadcast on television. In fact, she is feeling hyped since the Masked Royal is currently on stage, and watches intently as the pro-wrestler's Rockruff fires off a Rock Throw to clash with Litten's Ember…