Ash, Misty, Brock, and Pikachu are walking down a trail towards Vermilion. Ash is feeling pretty proud of himself since he recently caught both Bulbasaur and Charmander. Suddenly, they all fall into a deep hole, but this one isn't by Team Rocket. It was dug by a Pokémon gang of Squirtles known as the sunglasses-wearing Squirtle Squad. Once they get out, Ash sends out Pikachu to attack, weaken, and catch a Squirtle, but they run off as Officer Jenny approaches. After Ash claims to have seen her before in Viridian, Jenny explains that that Jenny is her cousin. She goes on to say that all of her cousins are named Jenny, look exactly alike, and are all Police Officers. She then takes Ash and his friends to town and explains that the Squirtle Squad is a band of abandoned Squirtles who play pranks on the locals for revenge on humankind in general. She sadly adds that if only they had been treated better by their trainers, they wouldn't be like this.
Meanwhile, Jessie and James are on a nearby cliff, spying on everything that's going on. Jessie is eager to attack, but all James and Meowth have their minds on is lunch (just as long as it isn't pizza). Jessie whacks them repeatedly with her handy fan, until she realizes that she herself is hungry too. So she whips out a picnic basket, to the delight of Meowth and James. They're about to start when the Squirtle Squad shows up. They tie all three to a tree and start to eat in front of them. Jessie is enraged, and James is sad. They try to make a deal with the Squirtles, but they don't trust them. Then Meowth earns their trust by saying that Jessie and James are his pets. The Squirtles give him some food and they all continue to eat in front of Jessie and James.
Later, Misty goes fishing, while Ash, Brock, and Pikachu rest nearby. They are all sprayed by a Squirtle and when Pikachu tries to fight back, it gets thrown into the water. It tries to swim to shore, but is badly hurt by a Goldeen. Ash tries to save it, but is tied up along with Misty and Brock by the other Squirtles. Meowth comes out from his hiding place at laughs at them. The Squirtles were acting under his command.
The Squirtles take them all to a cave, tie them to a rock, and place Pikachu into a cage. Brock tells Ash that unless they can give Pikachu a Super Potion, he will be in big trouble. Ash begs the leader Squirtle to let him go into town to get it, and he gives in, giving him until noon the next day to get back or else they'll dye Misty's hair purple.
Ash gets to town as fast as he can, considering that he tripped over rocks, fell into a river, and was attacked by a Goldeen. He approaches the door, but it opens in his face and he is knocked out. Just as he wakes up the next day, Jessie and James rob the store of flash powder, to use on the Squirtle Squad, and dental floss, for their teeth. They load it into their balloon and start to fly off. Ash goes in and almost gets shot if it weren't for Officer Jenny, and gets the Super potion he needs. Officer Jenny gives him a ride to the cave and he goes in, only to find it completely vacated. He starts to worry about Pikachu, Misty, and Brock and rushes out, only to find them all standing there with the Squirtles and Meowth. He applies the Super potion, but Pikachu is still quite weak.
Team Rocket shows up and start throwing flash bombs at the Squirtles. Meowth grabs Pikachu, and climbs up the rope ladder into the basket. Ash, Misty, Brock, and the Squirtles dash back into the cave entrance to take cover, but the Squirtle Squad's leader has fallen on its back and can't get up. Ash runs out and covers the Squirtle with his body to protect it. Squirtle is overcome and, in a stunning move, he lifts Ash over his head and carries him to the cave.
Team Rocket starts to make their getaway, but the leader Squirtle uses a powerful Water Gun, and pops a whole in the balloon. James Drops Pikachu out, and Ash runs out and catches him . Team Rocket goes flying off into the distance. Then everyone notices that the flash bombs had started a forest fire. Officer Jenny says that if it isn't put out, the whole town is in danger. Ash tells the Squirtle Squad that if they all use their water gun attacks, they can put out the fire. They do so, and a few minutes later, the fire is out.
The locals are thankful to the Squirtles, and appoint them the official town firefighters. Ash, Misty, and Brock leave, but the Squad’s leader keeps following them. Ash asks if he wants to join him, and Squirtle nods, taking off his glasses. He jumps into Ash's arms, and they all continue on to Vermilion.