Admiring his newly earned Jade Star Badge, Ash heads for the Orange League Competition with his friends Misty and Tracey. Tracey collects a sample of salt water from the ocean stating that it's strictly for Pokémon research purposes. Seeing something moving underneath them, Pikachu turns the group's attention to the large shadowy figure underwater. Suddenly, they're confronted with a submarine, and inside it is a man who informs Ash that they're just in time for "one of the most astounding scenes ever seen on the seas." Moments later, large schools of Magikarp pass by. Noticing the colored bands on the Magikarp's tail, Tracey tells Ash and Misty that the Magikarp are probably headed for Rind Island. The group decides to investigate.
Arriving at the shore, Ash and the others soon find the Magikarp swimming upstream. They also see the man they saw in the submarine carrying heavy supplies and equipment. He gives everybody something to hold, and tells our heroes to follow him. Misty asks for the man's name, and he replies by saying he's Quincy T. Quackenpoker, a Pokémon Watcher who's dedicated to the study of Magikarp. Tracey recognizes the famous doctor, and tries to make a quick sketch of the Magikarp hoping to learn something out of it. Instead, he gets a splash in the face, and Quackenpoker suggests that next time Tracey should use a waterproof pen.
Exhausted from their long hike, Ash and Misty decide to take a break as Quackenpoker analyzes the Magikarp in the river. He explains to Tracey that the Magikarp born on Rind Island swim out to sea to mature, but every year they return to their birthplace, no matter the circumstances. He also adds that the colored bands on the Magikarp's tail tell him how long ago they left this island. Red ones left 1 year ago, blue ones left 2 years, and the yellow ones left 3 years ago. Noticing that he's also a Pokémon Watcher, Quackenpoker asks if he can take a look at Tracey's sketchbook. He agrees, and Quackenpoker says that Tracey has a great future ahead of him.
Unknown to the group, Team Rocket is spying on them nearby. James and Meowth decide that the Magikarp aren't worth stealing, and capturing Pikachu should be their objective, but Jessie tells them of her "master plan". If they train the Magikarp enough, it would evolve into Gyarados. And with an army of Gyarados, Team Rocket would be the Pokémon Masters of the world. James rebukes saying that they haven't had much luck with Gyarados, but Jessie enlightens him and their decision is final.
Continuing down the river, Ash, Misty, Tracey, and Quackenpoker find an astounding sight. They see the Magikarp swimming up a series of waterfalls. Ash doesn't understand the logic behind this, but Tracey tells him that it's to build up their strength, much like Pokémon training. Quackenpoker adds that 50% of the Magikarp won't make it up the falls, and those who don't will keep trying until they are able to. Armed with fishing nets, Team Rocket prepares to seize the Magikarp swimming upstream. James tells Jessie that it would be easier to use Pokéballs, but Jessie explains to him that Pokéballs cost money: something they don't have. James catches a Magikarp, but it soon escapes. Team Rocket grabs the runaway fish, who has already made it's way back to the water. Jessie, James, and Meowth are soon dragged down the waterfall with the Magikarp in their grasp.
Hearing Team Rocket's cry, Ash suggests that someone might be in trouble. Not hearing anything, Quackenpoker says that they'll be the ones in trouble if he doesn't see the Magikarp evolve. Shocked to know that they'll soon be seeing Gyarados, the team heads over to a lake, where they set up camp. During suppertime, Quackenpoker comments on how he's never seen such an everlasting relationship between Ash and Pikachu. He also comments on Togepi, and how it likes to be tickled on it's front spike. Tracey notices that Magikarp isn't the only Pokémon that interests Quackenpoker, and he responds, "All Pokémon interest me, but Magikarp are my favorites by far. When I was a boy, I woke up one morning and I saw a Magikarp in my pajamas. How a Magikarp got in my pajamas, I'll never know."
That night, while everyone else was asleep, Tracey tells Quackenpoker his theory on why the Magikarp jumps in and out of the water. He says that perhaps they use the position of the sun to help them find their way to Rind Island. Quackenpoker turns Tracey's theory down by saying that some of the Magikarp that cannot jump can still find their way back home.
The Magikarp start to jump franticly, waking up Ash and Misty. Quackenpoker says that when that happens, something exciting is about to occur. The waters turn rough, and Team Rocket's submarine appears. They begin to capture the Magikarp one by one. After stealing an abundant number of them, Meowth starts to notice that they're sinking. Realizing that the fish are weighing them down, James releases several Magikarp in attempt to balance out the weight. The submarine docks in front of our heroes, and Jessie and James make their dramatic appearance. Bored, the gang waits for Team Rocket to finish their motto. Quackenpoker demands that they release the Magikarp, but Jessie says that they have to capture them like they did. With Magikarp in hand, Jessie, James, and Meowth start to bombard the team with falling fish; forcing Ash, Tracey, and Pikachu to catch them. While Ash is preoccupied, Meowth activates a button and encases Pikachu in a glass jar. Ash commands Pikachu to use a Thunderbolt, but Quackenpoker stops him saying that he'll injure the Magikarp. Ash decides to use Bulbasaur to try and grab Pikachu's cage with a Vine Whip. Bulbasaur slaps James in the forehead, but is unsuccessful at grabbing Pikachu. Recovering from the Vine Whip, James wakes up with a Magikarp stuck on his head. Jessie and Meowth try to pull it off, but they have no luck. Seeing that they'll soon pull the Magikarp's head off, Quackenpoker climbs to the top of the submarine and starts rubbing Magikarp gently until it lets go. While Team Rocket is celebrating from the incident, Ash secretly takes Pikachu back and heads for the shore. Ash frees Pikachu from the jar, and the Magikarp in Quackenpoker's arms starts to glow. Aware of what is going to happen next, Quackenpoker releases the Magikarp as it swims to the middle of the lake, turning the water into a luminous white glow and creating a typhoon that whisks Team Rocket off the island. Several of the Magikarp evolve into Gyarados as they make their way back to the ocean. Asking for Tracey's assistance, Quackenpoker tells him to count the number Magikarp with red and blue rings. Tracey stops at a cliff, and reports that 70% of the Magikarp evolved: the highest percentage ever recorded. As night turns into dawn, Quackenpoker thanks Tracey for helping him unravel some of the mysteries of Magikarp evolution. Inspired, Ash tells Pikachu that if they work hard, they can win in the Orange League Competition.
Meanwhile, stranded on a rock, Team Rocket is surrounded by a mob of Gyarados. Trying to be optimistic, Jessie suggests that the Gyarados are much friendlier than they seem. Think again, Team Rocket!