Shirley, Milly and Nina ride a bullet train out of the Tokyo settlement to Lake Kawaguchi. Nina is frightened, but Shirley and Milly reassure her that it’s not a scary place like the ghettoes. Kallen, Ohgi and the other rebels meet Lelouch on a large Britannian transport truck, which he says will now serve as their base. Someone turns on the TV, which is is showing breaking news out of Lake Kawaguchi. JLF members led by Kusakabe have taken everyone hostage at a convention center which was holding a yearly conference on the rare mineral Sakuradite, which is available only in Japan. As the camera pans to show the hostages, Kallen spots Milly, Shirley and Nina. Three Sutherlands are sent into the tunnel that runs under the lake to the hotel, but they’re immediately destroyed by the Raikou, a superconducting shotcannon. Darlton comments that it’s a good thing the JLF doesn’t know Euphemia is one of their hostages, otherwise they’d use her as leverage. At the lakeshore, Suzaku asks why they’re not allowed to participate in the rescue operation, and Lloyd explains that they’re treated as irregulars because of their command structure. Suzaku guesses that they also don’t want to put an Eleven on the rescue operation, and Cecile questions what the point is of the Honorary Britannian system. As the rebels outfit the truck, Lelouch watches a TV interview where Shirley’s father begs for her release. He thinks it’s too early for him to act, but he doesn’t want to leave the situation as is. He knows Cornelia will ignore the hostages and wonders why she hasn’t made a move yet. Cecile and Suzaku work on the Lancelot, and Suzaku spots some activity on the hotel’s roof. He zooms in and watches in shock as the JLF toss a hostage off the side of the hotel. Kusakabe sends a message stating that he’ll toss a hostage very 30 minutes until his demands are met. Guilford and Darlton suggest negotiating for the release of women and children, but Cornelia refuses and says they can’t show weakness by acknowledging the terrorists. An officer tells Cornelia that there’s a message from Zero, and Diethard is informed that Zero has stolen one of their camera trucks. Lelouch rides on top of the truck right through the Britannian forces, and Cornelia blocks his path and pulls out a fancy pistol to get her revenge for Clovis. Lelouch asks if she’s choosing Clovis or Euphemia, and he vows to rescue Euphemia. Cornelia reluctantly lets him through. Lloyd tells Suzaku that they’ve been given permission to launch, and Suzaku is willing to go, even though he knows he’s serving as a decoy.
As the Lancelot is prepared for launch, Suzaku is briefed on the mission. His orders are to proceed to the hotel’s basement and destroy the support line, causing the hotel to sink to the lake. As the hotel sinks, another team will rescue the hostages and eliminate the terrorists. The Lancelot is equipped with the VARIS rifle, and Lloyd tells Suzaku to make sure that the Lancelot isn’t damaged. As the Lancelot is lowered into the tunnel, Suzaku recalls Shirley inviting him on the trip. In the hotel, Nina panics when she sees an Eleven, and he points his gun at her, insisting that she call him Japanese. He grabs her and tosses her aside, and suddenly Euphemia stands up and reveals herself, demanding to see Kusakabe. In another room, Lelouch asks Kusakabe if he wants an alliance, but Kusakabe says he wants to see what’s under the mask first. Lelouch asks Kusakabe what he intends to accomplish, and Kusakabe answers that he wants to show the world that the Japanese live on. Lelouch calls him old-fashioned and says he can’t be saved. Suzaku takes off and manages to avoid the shot fired by the Raikou. Kusakabe jumps at Lelouch with a sword, but Lelouch uses Geass and orders him to die. Shots ring inside the room, and Lelouch explains that Kusakabe and the others committed suicide. He asks Euphemia if she stood up to save the hostages and comments that she’s the same as ever. Lelouch mentions Euphemia’s appointment as Vice Governor-General, but she says it’s nothing to be happy about. He says that must be because he killed Clovis, who issued the orders to murder Elevens. Euphemia asks Lelouch if that’s the reason why he killed Clovis, and Lelouch says it’s because Clovis was a child of Charles. He points out that Euphemia is too and pulls a gun on her. Suzaku fires the VARIS rifle and destroys the Raikou cannon. He then emerges from the tunnel and destroys the hotel’s support structures, which causes it to sink into the lake. As the Lancelot descends, Lelouch detonates explosives on the hotel’s top floors. After the smoke clears, Lelouch emerges on a boat surrounded by the hostages in rafts. The rebels stand at his side in black uniforms, and he declares them the allies of justice, the Order of the Black Knights. He says that they punished the JLF for underhanded tactics and will protect the weak, be they Elevens or Britannians. He adds that he punished Clovis for similar brutality. He vows that the Black Knights will appear wherever the powerful oppress the powerless.
Although this episode starts as a nice trip for Shirley, Milly and Nina, it quickly turns into a nightmare. Perhaps urged by Zero’s sudden appearance in the spotlight, the JLF takes hostages at the Lake Kawaguchi Convention Center to make a symbolic statement about Japan’s survival. However, it doesn’t look like the entire organization approves, as Tohdoh is visibly bothered by Kusakabe’s actions. In the last episode, Lelouch vowed to build his own army, and he’s done just that with the Order of the Black Knights. However, rather than just being a simple terrorist group, he’s brilliantly positioned the Black Knights as an ally of justice that fights to protect Britannians and Elevens alike. Even though Suzaku did a lot of the work by fighting the Raikou, Zero gets the credit and comes off looking better than Cornelia. That’s bound to make her angry.