Ash, Misty, and Tracey are heading towards Navel Island, home of the Sea Ruby Badge. According to Tracey, it's a seashell with a ruby on it. The island comes into view, and it's most prominent feature is a huge mountain. Ash gets excited, and they hurry over.
Once on the island, they don't see anybody. Ash wonders aloud where the gym is, and they notice someone on a sailboat in the water behind them. He beaches the boat, and asks them if they're looking for a badge. He introduces himself as Danny, and Ash and his friends give him their names. He comments on how beautiful Misty is and shakes her hand while Ash and Tracey look on, dumbfounded. In the water, meanwhile, Team Rocket are approaching in their Magikarp sub. They pep themselves up with old sayings, and prepare to follow Ash and his friends.
Danny takes Ash and his friends up a path towards the mountain. Misty notices his huge backpack, and he tells them that he always tries to plan ahead. Misty teases Ash about this, and they start to argue. Danny turns around and laughs, saying that "you always hurt the ones you love." He starts to walk again with Misty at his side, protesting about how untrue that saying is. Ash mumbles about how mean Misty is and asks Tracey who Danny is. Tracey suggests that he is another trainer who wants the badge as well, and they both start to walk again.
Moments later, they reach the gates to the Navel Gym. Ash and Tracey push them open and see a small building at the base of the mountain. Tracey goes over to a sign and tells them that Pokémon trainers who want the badge need to climb up the mountain without using their Pokémon's help. Anybody accompanying the trainers may take the cable car up to the top. With a little pre-encouragement from Pikachu, Ash starts in, with Danny coming along.
Ash and Danny slowly climb up the mountain with Pikachu climbing as well. Tracey and Misty go by on the cable car, and Misty tells Danny to be careful. Ash (jealous again, I believe) slips on a loose stone and falls a few yards. He's about to send out Bulbasaur to help him when Danny reminds him not to, or else he'll be disqualified. He gets out of it himself, and starts to climb some more.
Another ways up, the three stop to rest on a large ledge. Ash thanks Danny for reminding him and he just nods. Suddenly, a suction cup flies out of the sky and grabs Pikachu. The clouds part, and Team Rocket's Meowth balloon becomes visible. Jessie and James start in on their motto, but are cut short when Danny removes the suction cup from Pikachu and it flies back at them. Annoyed, they cast it back at Ash and Danny, only to attach it to a large rock. It flies back towards them and busts a hole in the balloon canvas. It flies up the mountain and into the clouds. They move closer to the mountain, and notice several geysers. One hits them and they are flung into the air again.
That taken care of, Danny and Ash continue their climb. They reach the snowy part and Ash starts to shiver. Pikachu slumps over, freezing, and Ash wraps his vest around it. Holding it tight, he walks up the snowy slope. Impressed at Ash's love for Pikachu, Danny follows.
A few moments later, they reach the peak. Tracey and Misty, wrapped in blankets, hurry over. Misty dashes past Ash and starts to fuss over Danny. He walks over to Ash, telling him that he passed. Misty and Tracey tell him that Danny is the Gym Leader and that the mountain climb was a test to see who would be "worthy." Danny agrees, and asks Ash if he's ready for a challenge.
He tells Ash that to win his badge, he needs to win 2 out of 3 challenges. The first challenge, he says, is to see who can freeze hot water the fastest. As if on cue, two geysers spurt out of the ground near him. He sends out Nidoqueen, and Ash uses Lapras. They both use Ice Beam, and both quickly start to freeze their respective geysers. Nidoqueen wins, however, but Lapras finishes not far behind.
After moving the two columns of ice to the ledge, Danny introduces Ash to the next challenge. He gestures to a sign picturing three views of a sled and tells Ash that he needs to carve a sled like that out of the ice using three Pokémon. Ash decides to use Pikachu, Bulbasaur, and Charizard (been a while since we've seen it). Danny decides on Machoke, Scyther, and Nidoqueen, and the challenge begins. All three of Danny's Pokémon start in immediately, but only Pikachu and Bulbasaur start on Ash's chunk of ice. He pleads with Charizard to use its Flamethrower, and it does, but on Ash. Ash dodges them, however, and the flames melt out a perfect sled. The third challenge begins.
In this challenge, both Ash and Danny choose three Pokémon to ride in the sled with them down the mountain to a finish line on the beach. Ash chooses Pikachu, Squirtle, and Bulbasaur to help steer. The light turns green, and Ash and Danny start down. Danny's Scyther holds the sled very well, but Bulbasaur is a little less fortunate. Their sled starts to spin. Danny speeds ahead, but flips over hole. Ash stops to help, and Danny tells him that he thinks it was a trap. Ash tells him that it was most likely Team Rocket, and three snowmen nearby explode and show that he was right. Danny asks Ash if they're friends of his, and Ash yells at them to leave. They don't, of course, and Meowth pushes a button on a remote control, making Ash and Danny fall into a larger hole.
A mechanical hand pulls Pikachu out of the hole before Ash realizes it, and it is quickly put into a glass jar. Team Rocket starts to float away in their balloon. Pikachu tries to shock them, but only manages to power a toaster and coffee machine. Suddenly, they are hit with a barrage of snowballs. They look over the edge, and see that Ash and Danny have gotten out of the hole. The two humans pack snowballs, and Squirtle and Bulbasaur hand them to Danny's Geodude, who throws them at the balloon. The basket starts to fill up with snow, and they try to throw them back. Scyther rolls Electrode onto a seesaw, and Ash and some Pokémon send it up to the balloon. Pikachu falls out and into Ash's arms. James sends out a Pokémon, but it turns out to be Victreebel, who eats his head. Electrode falls into the basket and uses Explosion, sending Team Rocket out of the episode.
Now that they've finally gotten rid of Team Rocket, Danny and Ash continue their race. The snowy slope turns rocky, and Ash almost hits a large boulder. Fortunately, Bulbasaur steers around it, but they go into a forest. Danny, not seeing Ash, speeds toward the finish line. Suddenly, Ash flies out of the trees and lands right next to Danny, his sled shattering to just a small disc. They're neck and neck until Ash hits another rock, which speeds him up just enough to pass Danny and win the race. He can't stop, however, and zooms into the water, casting up a large wave.
Misty and Tracey, who took the cable car down, stare amazed. Danny gives him the Sea Ruby Badge, and he thanks his Pokémon. Ash and his friends set off again on Lapras, and Ash looks at his new badge as they ride over the horizon