Ash, Misty, and Brock are still on the island, waiting for the next boat to the mainland. Suddenly, Misty sees an injured Horsea. The Horsea squirts out a bunch of ink in an attempt to warn them of something, but they don't understand. Misty is about to capture it, when a loud explosion is heard. They all look up and see a large ship on fire. Misty sends out Staryu, Starmie, and Goldeen to rescue the sailors, while she, Brock, and Ash get a boat. They reach the sailors, but the sailors are too shocked to be able to say anything.
Ash and his friends them meet Nastina who looks exactly like Brutella from "Beauty and the Beach". She tells them of her plans to build a resort out in the water, where guests can stay in comfort and view coral reefs. She then complains that several Tentacool have been thwarting the operations, attacking her workers, and keeping tourists away. She wants them exterminated, and offers Ash and friends the job. In return, she offers them free dinners for a year, a million dollars, and vouchers for free hotel stays. Ash is eager to accept, but Misty is enraged. When they ask her why, she expresses her thoughts of how cute they are. Ash and Brock don't agree, but they give in.
They check on Horsea, who is doing quite well. Horsea is still looking worried, however, and it dawns on Ash that the picture Horsea drew with his ink looked like a Tentacool. Suddenly, Nastina's voice comes over the town P.A. System, offering the million dollars to anyone interested in exterminating the Tentacool. Misty doesn't think the people would be interested in this, but she is way wrong, and our friends are run over by the mass of people willing to help. Nastina wheels out in her own personal tank and asks who will earn the million dollars. A rose with a suction cup on the end comes flying through the air and sticks to the tank. It's Team Rocket again. After doing their motto, they offer to exterminate the Tentacool for her. They roar off towards where the Tentacool are located.
While Team Rocket heads toward the location, they go over what they are going to do. They plan to kill the Tentacool by pouring their "Super Secret Stun Sauce" into the ocean. They will then round them all up, and sell them at a fish market for even more money. Suddenly, the water around their motorboat fills with Tentacool. Meowth tells Jessie and James to dump the sauce, but they don't have enough for the thousands of Tentacool. One Tentacool shoots the boat with some kind of ray, blasting the barrel of stun sauce out. The barrel lands on one Tentacool, and he evolves into an abnormally huge Tentacruel, who tears apart the skeleton of the resort. Nastina fires at the huge creature, but the bullets bounce right off.
The Tentacruel and Tentacool then start to destroy the city, blowing buildings apart with their beams. Suddenly, everyone notices that Meowth is still in the Tentacruel's tentacle. Using him as a puppet, the Tentacruel explains that, since humans destroyed their home, they are going to destroy the humans' homes. The Horsea pleads
with the Tentacruel to stop, only to be hit with a huge tentacle. Ash sends out Pidgeotto, who grabs Horsea in midair and brings him back to Misty. Ash, Misty, and Brock then send out Squirtle, Bulbasaur, Butterfree, Pikachu, Staryu, Starmie, Goldeen, and Zubat to launch an all-out offense against the Tentacool.
The Pokémon seem to be effective, until the Tentacruel starts whack them with his tentacles. He explains through Meowth his wonder of why the Pokémon are fighting for the humans. He then declares that the Pokémon, since they are not on his side, must be his enemy. He is about to attack them again when Pidgeotto flies up with Pikachu on his back. Pikachu tries his luck with reasoning with the Tentacruel, and Misty joins in. She explains that the humans understand how they destroyed the Tentacool's homes and begs for mercy. Tentacruel, seeing how much he's frightened the residents, relents, and tosses Meowth across town and into the Ferris Wheel, knocking it over.
All the Tentacool and the Tentacruel start to move back into the ocean, when Nastina emerges from the rubble. She (stupidly) fires again at Tentacruel, only to be squirted by Horsea and flung into the air by the Tentacruel. She lands right onto Brutella, her cousin, who is rebuilding her restaurant. The building is destroyed once again by the impact. The huge Tentacruel then finally sinks down into the ocean, and leaves the city to repair itself.
Ash, Misty, and Brock board the boat, that has finally come in, and ask Misty if she still thinks jellyfish are cute. She says yes, but then says that Horsea is still the cutest. She tosses him into the air, catches him, and does Ash's Victory Pose. Ash is upset, as that is his pose, and they continue to argue as the ship sails on...