Yushiro and Miharu walk through the wooden gate and find a storehouse beyond it. Inside they find a large golden statue. An old man comes in and says he has been waiting for Yushiro. He claims that he guards the Kugai and the Threshold. He tells them to listen to the beat of the Kugai’s rhythm with their heart. Both Yushiro and Miharu put their hands on the statue and witness their past life from a thousand years before. The remainder of the episode is shown in an extended flashback to their past life as part of the Watanabe clan. An imperial edict is handed down to the Watanabe clan. Einyo, who looks identical to Phantom from the present day, talks before the Empress. Kiou Watanabe, head of the clan, tells his subordinate Tsuna (a previous incarnation of Kazukiyo) of the edict, which demands that the Watanabe clan hand over their Kugais. Tsuna wants to ignore the edict. Kiou says that the era when they led the ceremonial affairs of war have long passed. They are no longer the shadow powers supporting the Emperor, but mere royal guardians. Tsuna wants to return to their old ways and says that the Court has forgotten of them. Since the two cannot agree, it is decided that they will use the Kugai to settle their dispute. Einyo tells the Empress that they must deprive the Kugutsu of their Kugai, their source of power, in order to reign absolute. That night, the Kugai representing Kiou’s faction of the clan sits. Its pilot, Yushiro, who is masked, performs a dance and enters the Kugai. The Kugai departs their courtyard and heads outside, to an area known as ‘The Threshold’, where another Kugai, representing Tsuna’s faction of the clan awaits. The two Kugai do battle with one another. Yushiro’s Kugai quickly knocks down the other one and opens its cockpit. As it strikes the Kugai, it’s pilot’s mask is shattered and Miharu, Tsuna’s younger sister is revealed to be the pilot. Yushiro is surprised by this revelation and hesitates to behead Miharu, as is required. He instead jumps out of the Kugai and removes his mask. Tsuna states that Yushiro has abandoned his duty as a Kai. Kiou runs up to Yushiro and demands to know why he won’t take Miharu’s head. Tsuna, claiming Kiou to be without shame, shoots him with an arrow, killing him. Mitomi Watanabe calls out for her slain father but is held back. Tsuna says that the Gods have spoken and that anyone who opposes him should speak now. No one does. Tsuna tells Yushiro that he is now his master.
Tsuna orders all members of the Watanabe clan to assemble at his estate. Yushiro wonders why he stopped. A messenger reports these events to Einyo. Einyo states that they no longer have to conspire to have the Watanabe clan bring the Kugai to them. At their assembly, Tsuna asks those there what their thoughts are. Tsuna claims they have a traitor among them, an informer to the Court. He says they must rally as one and that the Emperor is trying to rob them, the Kugutsu, of their strength. He claims that the storyteller of the Gasaraki legend has been murdered by the Emperor. Mitomi states that these claims are unsubstantiated. She claims that Yushiro was victorious and that she feared speaking up before because she thought she’d be killed. Tsuna thinks she is biased since she was engaged to Yushiro. Tsuna claims that once the Kugutsu lose their Gods, they will have no choice but to perish, and that the Kugai are their vehicles to the Gods, the last entities that they can rely upon. Tsuna wants to take the Kugai into the capital in order to even out the vast number of troops that the Emperor has there. Since the Kai have forgotten their duties as master of ceremonies, he feels there is no reason to hesitate in using them. The Watanabe clan prepares for their siege, sending a messenger to rally everyone and prepares their Kugais. Tsuna visits Yushiro, telling him a repeat of what happened before will not be tolerated. He says he does not know if the Kugai were bestowed upon them by the Gasaraki or represent their karma, but that there is no doubt that they caused a rift among the clan and this rift was exploited by the Emperor such that they would annihilate each other. He knocks down the wall and tells Yushiro to listen as their blacksmith works on repairing Miharu’s Kugai. Tsuna says that since Yushiro, a Kai, disrupted the ceremony, the Kugais have returned to being but tools of war. Tsuna tells Yushiro that they will be departing tomorrow. Yushiro goes for a walk by a stream and comes upon a lily bell flower that he picks up from the ground. He finds Miharu walking nearby and walks up to her, giving it to her. Miharu asks Yushiro why he didn’t take her life on the Threshold. He says he does not know but he could not bring himself to take her life. She tells him that she would not have known of him or of heartache had he beheaded her as he was supposed to. She says all she possesses is her Kugai, and that she will head into battle as a Kai. Tsuna states that the Kugutsu will return to being puppeteers of society as he looks upon his head armament.
This episode and the following one are unique from all other episodes in the series in that they are almost entirely flashbacks to Yushiro and Miharu’s past lives as part of the Watanabe clan. After hinting of this throughout the series, these two episodes act as significant revelations and answers for what we’ve seen to this point. Yushiro and Miharu’s connections to each other, Kai, Kugutsu, Kugai, and the previous conversations about the Gowa family’s history all start to make a lot more sense after them. Both episodes take place in a different color scheme and feature different opening and ending animations (plus a remix of the opening theme) to further the distinction. I personally enjoyed this quite a bit and consider these two episodes the peak of the series. It is something I found to be very unique, particularly for the mecha genre.