Michio beats up Kenji and Mamoru for attacking their comrades and Fumihiko stops him. Kyouhei thanks him for doing the thankless part and Michio wishes he had comrades that would save an ally that was captured by the enemy. Cannon laments on almost killing an ally along with an enemy and Youkou says that’s what they’ve had to do up until now and why they’ve been searching for other ways to live. After being examined, Maya thanks her mother for telling her the truth and Chizuru promises to protect everyone. Kyouhei says pilots with higher aptitudes don’t live as long and Michio says it must have been worse in the old days. Kyouhei says he moved to the island so he could stay alive, and Michio concurs. Kyouhei says they should go, but Kazuki wants to stay and meet Maya. Michio says it’s best they leave it for the family members. The teachers meet at school and go over the plans for the Lantern festival. Cannon confesses to Sakura that she was going to kill her and Sakura says she was willing to die if she could avenge her father. She thinks it would have better if she had died, but Cannon says it’s not true. She says even though she was ordered to kill those captured by the enemy, she is glad Sakura didn’t die. She says she’s jealous because Kenji and Mamoru tried to save her, and Sakura says they’d do the same if Cannon were in that situation. Kenji and Mamoru invite them both to go make Lanterns and Kenji apologizes for shooting at Cannon. Fumihiko tells Chizuru to freeze Kouyou’s movements because he is trying to get back to the Festum. Tsubaki asks her classmates what a Bon Dance is and Seri yells at them when they give her the wrong idea. Chizuru puts Kouyou to sleep and apologizes for his pain up until now. Michio and Yumiko visit the graveyard and Yumiko tells Michio he better not die. She says she cried when he left the island and he promises not to die. The Festival kicks off and Tsubaki mentally asks Kouyou if he wants to die. She shuts off his containment unit and it breaks open. Mamoru and Kenji fawn over the girls’ yukatas and Cannon wonders if it looks good on her, which the guys insist it does. Mamoru’s dad asks Fumihiko if his crappy pottery sells, and Fumihiko says it doesn’t. Chizuru comes up and asks if she can get one. Mamoru shows Cannon some Gobain poses and she asks if that’s the Bon Dance. Sakura and Kenji tell him not to show her stupid things but Mamoru says he was going to show her a special attack. Sakura says if there’s a special attack, she wants to learn it but Kenji says there’s no need because him and Mamoru will fight for her. He says he wants to be stronger than Kazuki so he can protect her. Sakura gets flustered and says there’s no need. Kazuki tries to shoot down a gun with a cork gun, but gets a candy apple when he fails. Maya tries and knocks it down in one shot, much to Kazuki’s, Soushi’s and Kyouhei’s surprise. Kyouhei asks if she wants it, but she asks for a candy apple instead. Kouyou makes his way to the surface as everyone sends out their memorial lanterns. Tsubaki tells Kouyou to go to her.
The next day, Kouyou walks into his family’s old restaurant, saying he’s home. Kyouhei is shocked and draws his gun, but Kouyou leaves. Cannon hears Chocolat barking and goes to see what’s wrong. Kazuki sees Kouyou walking down the street and goes after him. Maya, Mamoru, Kenji and Sakura wonder where Kazuki and Cannon went and are shocked to see Kouyou is missing. They run off to find him and Kenji says it’s obvious where he’ll be. They find Kouyou and Kazuki at Shouko’s grave and take him to Sakura’s house. Kyouhei is in sniper position and the parents try to get them out of there, but the pilots refuse to hand Kouyou over. Sakura tells Soushi he should be with them, and Soushi asks Sakura’s mom if he can borrow something. Chocolat leads Cannon around town and she wonders if he’s looking for some one. Kouyou thanks them for saving him and tells Kazuki that he saved Maya. Sakura apologizes for not being able to save him, but he thanks her anyway. Soushi challenges Kazuki to a duel with wooden swords and Michio shows up in his Fafner. He calls everyone idiots and says he’ll beat them again. Kenji says they don’t care and that they would protect him the same way if he were assimilated. Kyouhei gets a clear shot but Maya notices and gets in the way. While they duel, Soushi thanks Kazuki for protecting Kouyou. Kazuki says that Kouyou was thankful and this surprises Chizuru. Seri, Rina and Hiroto wonder what’s doing on and Tsubaki says that a Festum is inside. She says she released him because he was like her. Kouyou asks the trademark Festum “Are you there?” and Maya backs away from him. Chocolat arrives and Kouyou bends down to pet him. Cannon also arrives and Kouyou asks if she’s there. Crystals come out of his hand and Kyouhei tries to take a shot, but Cannon is in the way. Kouyou keeps asking if she’s there, and Cannon says she was there, but not anymore. Kouyou sees Shouko, but it turns back into Cannon. He says that Shouko is already dead and starts crying. The crystals shatter and he screams. Kazuki comforts him and Kyouhei says he has a clear shot. Fumihiko tells him that Festums don’t cry. He says that this is the first step on the path to a world where Festum and humans co-exist.
Going with the same formula as the last few episodes, the first half is lighthearted fun while the second half is all business. It’s the highlight of any anime to be able to see the female cast in yukatas and we get that here. Some fun carnival hijinks occur, but the real highlight of the episode is Kouyou. Since Sakura could save him before he was completely assimilated he was able to regain his humanity and is much like Tsubaki. Fumihiko says that they’re trying to create a world where Festum and humans coexist, but it seems their previous actions contradict that. Only five episodes left in the series, so the plot should begin to heat up.