Battle of Fairy Tail arc

The Fighting Festival arc is the eighth story arc of the Fairy Tail series.

Fairy Tail is partaking in the annual Magnolia Harvest Festival, but Laxus and his personal body guards have other plans besides the festivities. The battle of Fairy tail between friends to determine the strongest, and the battle to prevent Laxus's coup d'etat from taking over their guild starts now.

New Guild. New Friends?
After their vacation, Team Natsu returns and finds that the guild has been completely rebuilt with a new design, including an open-air café, a souvenir shop, a pool, an amusement center, and everbody is now allowed to access the second floor. While the rest of the team is amazed with the new guild, Natsu frets, saying that it's not the same guild. The master then arrives and introduces the group to a new guild member, Juvia Lockser. The team warmly welcomes Juvia and thanks her for her help during their battle in the Tower of Heaven. Makarov is happy with the team's reaction and introduces another new member, Gajeel Redfox. The team is surprised to see the face of their former enemy but Makarov ignores this and tells them that he was only acting of Jose's orders. While Lucy sees Levy cowering at the sight of her former attacker, Natsu approaches Gajeel and begins to argue with him. Despite Gajeel's past, Makarov believes that he is not a bad guy but agrees with Erza that he should be monitored for the time being. The lights are suddenly turned off and Mirajane begins to sing to her guild mates. However, Mirajane is interrupted when Gajeel accidentally stepped on Natsu's foot, causing the two to fight and spark an all-out guild war.

The next day, a reporter from the Sorcerer Magazine, named Jason, arrives to interview the guild members. Seeing that Jason is interviewing all the other guild members and ignoring her, Lucy tries to get his attention by changing into a bunny girl costume, planning to dance at the stage. However, her plan is interrupted by Gajeel, who wanting to be closer to his new guild mates, begins to sing a song of his own composition called "Best Friend". The events are recorded by an overjoyed Jason whose article causes Fairy Tail's reputation to go worse.

Miss Fairy Tail
Cana, Juvia, Mirajane, Erza, Levy and Lucy take part the Beauty Contest.

Battle of Fairy Tail
Laxus, with the Raijinshuu, interrupts the contest and announces his plan to take over Fairy Tail. The members are hopelessly pit againt each other in fierce battles with the whole town as the arena.

Fairy Battle: The Queen vs The Wannabe
Erza beats Evergreen. One Raijinshuu down, two to go!

Lucy and Loke: The Unbeatable Tag Team
Lucy, with the aid of Loke (Leo), defeats Bixlow, the second Raijinshuu.

Satan's Descent: The Demon Mirajane
Seeing Elfman at the brink of death by Fried's sword, Mirajane reawakens her formerly lost power, a take-over magic called Satan Soul. Even as Fried turns into a demon himself, he's no match for an S-class mage and easily falls. Yet Mirajane, instead of finishing him off, cleanses his darkened heart with beautiful words of companionship.

Clash at Kardia Cathedral
Mystogan is the first to come face-to-face with Laxus. Holding the same amount of magic power, they would surely end up tearing each other apart were it not for Erza and Natsu's arrival, during which Mystogan's face is accidentaly revealed. He then disappears to avoid giving further explanations.

The Three Dragons
When Erza leaves the Cathedral to stop the Hall of Thunder, Natsu is left to fight alone against Laxus' overwhelming power. A split second away from meeting his brutal demise, he is saved by Gajeel and they reluctantly team up. The real fight begins now. Even fighting side by side, they barely manage to land a few attacks on Laxus before he reveals himself as a third (though artificial) Dragon Slayer. Giving Natsu and Gajeel a taste of his true power, he proceeds to kill all guild members with the uber-magic Fairy Law, but it fails because he apparently doesn't see them as real enemies. Natsu gets up and attacks Laxus once again, and even after being pummeled to the floor repeated times, he refuses to stay down. The enraged Laxus uses his last magic reserves in a powerful attack capable of killing Natsu, but it's redirected by Gajeel who uses himself as a lightning rod. With a multitude of Dragon-slaying attacks, Natsu finally manages to finish Laxus off.

The Tearful Judgement and The Fantasia Parade
Laxus, wrapped in bandages, returns to the guild and meets his grandfather at the nursery room. After a valuable lesson concerning what a guild is truly meant to be, Makarov excommunicates Laxus, his tears reflecting the grief on his heart for having no other choice. Later that day, during the Fantasia parade, Laxus is seen watching the event from a distance. His grandfather then raises his hands up in the air, followed by all of Fairy Tail's members; His symbolic gesture shows Laxus that, even after all the trouble he has caused, everyone will always be watching over him. Bursting into tears of regret, he walks away...