Battle of Fairy Tail arc

The Fighting Festival arc (also known as the Laxus arc) is the eighth story arc of the Fairy Tail series.

Fairy Tail is taking part in the annual Magnolia Harvest Festival, but Laxus and his personal body guards, the Thunder God Tribe, have other plans besides the festivities. The Battle of Fairy Tail, a battle between friends to determine the strongest, and the battle to prevent Laxus from taking over the guild begins.

Fairy Tail: Renovated
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 everybody is now allowed to access the second floor. While the rest of the team is amazed with the new guild, Natsu frets, saying that the guild doesn't feel the same. The Guild Master Makarov 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 satisfied with the team's reaction and introduces another new member, Gajeel Redfox. The team are overwhelmed to see the face of their former enemy who destroyed the guild, but Makarov ignores this and tells them that he was only acting on Jose's orders as a loyal guild member. 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 actions, Makarov believes that he is not a bad guy but agrees with Erza that he should be monitored for the time being, to make sure he is not a spy. The lights are suddenly turned off and Mirajane begins to sing to her guild mates and all the guild members enjoy her beautiful song. However, Mirajane is interrupted when Gajeel accidentally steps on Natsu's foot, causing the two to fight and begin an all-out guild war, which is only stopped when Makarov, knowing that the reporter from the Sorcerer Magazine will be visiting the guild the day after, uses his Titan Magic to scare his "children".

The next day, Lucy prepares herself accurately to be ready for the interview, and Gajeel is shown having tied up and gagged a scared Mirajane, staring at her with a menacing look. As promised, a reporter named Jason arrives to interview the guild members and Lucy tries her best to appeal to him. 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 on the stage. However, her plan is interrupted by Gajeel, who is revealed to have gotten rid of Mirajane because, wanting to be closer to his new guild mates, he wanted to sing a song of his own composition called "Best Friend". However, he sings so poorly that the members start throwing tomatoes at him. The events are recorded by an overjoyed Jason, whose article causes Fairy Tail's reputation to get even worse. A man with a long beard covered in a torn hooded cape is shown getting hold of one of the magazine's copies, and sheds tears while looking at Lucy's picture and pronouncing her name.

Days after the article about Fairy Tail has been published, Laxus Dreyar, in another town, spots a group of men laughing at the article about Fairy Tail. After seeing Laxus, the group is intimidated and runs off. Laxus then sees Zatô, a member of the Dark Guild Naked Mummy. Zatô begins to belittle Laxus, who gets irritated and knocks him unconscious with one powerful attack. After defeating Zatô, Laxus expresses his anger and rage, blaming Makarov for Fairy Tail's bad reputation.

Miss Fairy Tail
After returning to the guild, Lucy is trying to look for a job that she can do by herself so that she can pay her rent, since Gray was ordered to accompany Juvia, Erza is getting her armor repaired, and Natsu is still feeling the after effects of eating Etherion. Lucy has a possible job contract which is stolen away by Gajeel before she can reach it, something which makes her angry, with the Iron Dragon Slayer laughing the matter off and leaving. Gajeel is later confronted by Jet and Droy, who still haven't forgiven Gajeel for his past actions. Angered that Gajeel has joined the guild after having destroyed it during the guild war, Jet and Droy begin to attack him, while Levy tries to tell them to stop from the sidelines. Though Jet and Droy continue their assault on him, Gajeel refuses to defend himself or fight back. Just as the two stop to ask him why he isn't fighting back, Laxus arrives and begins to pulverize Gajeel as well, blaming him for destroying the old Fairy Tail building and further ruining the guild's reputation.

As Laxus attacks Gajeel with his Lightning Magic, Jet, Droy and Levy try to stop him, after realizing that Gajeel didn't defend himself since he wanted to be recognized as a fellow member of Fairy Tail. Irritated by the team, Laxus attacks them with a bolt of lightning. As it is about to hit Levy, Gajeel shields her, much to everyone's surprise. Gajeel then leaves, saying that he has work to do. An angry Laxus leaves as well and, with his tolerance at its limit, promises to himself that he will have Fairy Tail.

In Lucy's apartment, after a comedic incident which sees the girl enter her bed while Natsu and Happy are sleeping in it, she is informed of the "Miss Fairy Tail" Contest, a female beauty contest which will grant the winner 500.000, and decides to take part.

Elsewhere, the Dark Guild Ghoul Spirit is annihilated by three Fairy Tail Mages, Freed Justine, Bickslow and Evergreen, revealed to be the Thunder God Tribe, Laxus' personal body guards, which readies to return to Magnolia for an unspecified plan machinated by their leader Laxus, who's seen waiting for them in town, claiming that Makarov's reign as guild master is over. In the meantime, Makarov himself is making preparations for the Fantasia parade alongside Mirajane. When she comments that it would be good for Laxus to join in, since she has been told by Levy that he's in town, Makarov remembers when Laxus was younger, a kind boy who was proud of his grandfather and wanted to join Fairy Tail, and wonders what changed him and made him into his current self.

The Festival finally begins, and the first event is the Miss Fairy Tail contest, with Lucy hurrying towards it and Juvia being revealed as a participant too. Max Alors acts as the announcer, and presents the contestants one after another: Cana Alberona first appears and uses her card magic to infatuate the crowd. Juvia then uses her water magic to charm the crowd. Mirajane then ruins the mood by doing a few weird transformations but when Erza uses her re-quip magic, the crowd gets back in the mood. Levy then appeals to the crowd and then Bisca Mulan as well. Then, when Lucy finally begins her act, Evergreen suddenly appears, claiming to be the rightful winner, and turns Lucy to stone through the use of her Stone Eyes, revealing to have done the same to all the other contestants, much to everyone's dismay.

Battle of Fairy Tail
Laxus and the rest of the Thunder God Tribe appear as well before the shocked eyes of the other guild members. Laxus states that they'll be playing a game to decide the strongest in Fairy Tail is, and that the petrified girls will be kept as hostages, to prevent their guildmates from breaking the rules of the game. Natsu, pumped and by no means shocked or afraid, seems to approve of the contest, gets ready for battle.

Natsu, excited, charges towards Laxus, but is struck and knocked unconscious by Laxus' lighting in an instant. Evergreen goes on to explain that their fellow Fairy Tail Mages will have to find and defeat Laxus and the Thunder God Tribe in three hours, or the girls will meet their demise. The battlefield shall be the entire town of Magnolia. Having announced these things, the four opponents disappear, and their guildmates start leaving the place, rushing around to search for them in town. Makarov tries to leave as well, but finds that he is incapable of doing so, with the area having been previously surrounded by one of Freed's enchantments, preventing stone statues those older than 80 years from leaving the enchantment. Makarov is then forced to remain behind while his "children" search for the opponents. The Master asks Reedus Jonah, who remained behind since he was afraid of Laxus, to find Porlyusica in the East Forest, since she may have a cure to release the girls from petrification.

In that very moment, Natsu wakes up, and, spurred by Makarov to go and defeat Laxus rushes towards the enchantment and finds it impossible for him to leave due to Freed's barrier, despite it blocking the exit only to those older than 80 years and to stone statues, with Natsu not belonging to either of the two categories.

Meanwhile, the first battle between comrades takes place, with Alzack Connell being forced to fight and defeat Jet and Droy in order to escape one of Freed's barriers and keep searching for the opponents to save Bisca. Both Laxus and the ones stuck in the guild are informed of this, with Laxus rejoicing, and the others remaining shocked.

Fights between comrades to escape Freed's enchantments rage on everywhere in town, with Makarov looking on as more than half of Fairy Tail is defeated by internal disputes, and Natsu trying to leave the barrier to join the fray, despite still considering Laxus a comrade and a member of their guild.

Elsewhere, some guild members run across the Thunder God Tribe: Reedus, prevented from leaving the town by one of Freed's enchantments, gets to meet the leader of the Tribe himself and faces defeat at his hand while Gray is pitted against Bickslow. Shortly afterwards, Evergreen defeats Elfman, causing more shock to Makarov, Natsu and Happy.

As Reedus is easily defeated by Freed, Laxus, through the use of a Thought Projection, appears before Makarov, Natsu and Happy. He expresses wonder at the fact that Natsu actually thinks he's bluffing about killing the prisoner girls, and says that, with both Natsu and Erza out of the way, none of the members can stand up to his Thunder God Tribe. The others object that there's still Gray, and state that Laxus shouldn't underestimate him. Gray is shown fighting Bickslow in a shop, with neither of them managing to gain the upper hand on the other. Having revealed that, through his Seith Magic Human Possession, he can freely change the "containers" for the souls he employs in battle, Bickslow runs away, forcing Gray to chase after him.

Bickslow manages to draw Gray in an alleyway, where one of Freed's barriers is revealed, preventing those inside it from using their Magic. Gray, unable to use Ice-Make, suffers heavy damage from the blasts Bickslow's dolls fire to him from the outside, and, despite managing to land a punch on Bickslow, he's defeated, much to the dismay of Makarov, Natsu and Happy, and to the joy of Laxus.

With Gajeel nowhere to be seen, Makarov surrenders to Laxus, asking him to stop the whole thing. Laxus, however, says that, in order to end the battle, Makarov has to resign his position of Guild Master in his favor, stating that he has just an hour and a half left to do so, before the petrified girls crumble to dust. Laxus states all Makarov has to do is to give the announce to the loudspeaker, and, when Natsu tries to attack his Thought Projection, it disappears.

Makarov claims he wouldn't have problems giving up his title, but that Laxus isn't the one he can trust it to. Gajeel suddenly shows up and readies to go after Laxus, but, much to his and everyone's dismay, finds himself incapable of passing through Freed's barrier too. Elsewhere, Evergreen is shown having defeated a large amount of Fairy Tail members.

Bickslow defeats Nab Lasaro and Laki Olietta, claiming that he doesn't have weaklings for comrades. Freed appears before an injured Alzack. The latter, angered, uses Guns Magic: Tornado Shot against Freed, but the opponent easily cuts through it with his sword, and then defeats him due to the conditions of one of his barriers, this being to deprive those who use Magic inside it of oxygen.

With only Natsu and Gajeel left, but confined within the barrier, Natsu thinks they should depetrify Erza, believing he could do so with his fire, much to the others' alarm. He opens up a crack on Erza's petrified face, but the results are good, as the girl is then freed from her stone prison, with her punching Natsu for burning her. She was freed due to her Magical eye having absorbed half of the offending Magic. This way, one more fighter for Fairy Tail joins the fray, rapidly followed by another: Mystogan who makes his appearance as well, readying to take part in the battle.

Fairy Battle: The Queen vs The Wannabe
With the appearance of Erza and Mystogan, Laxus comments that makes the three top Mages of Fairy Tail. While running around, Erza is confronted by Evergreen, who express wonder at her having gotten free, and states that her calling herself "Titania" greatly irritates her, the "true" queen of the fairies. The two start fighting, with Evergreen bombarding Erza with her Fairy Magic and Erza dodging and counter-attacking with her swords.

Evergreen believes herself to have gained the upper hand due to the immense amount of needles produced by her Fairy Machine Gun: Leprechaun, but Erza starts wielding a pair of swords, in addition to the two she's already using, with her toes, managing to pin her opponent to a wall. When Evergreen states that, through her Stone Eyes, she could potentially destroy the petrified girls remotely, and demands that Erza prostrate naked before her, Titania instead requips her Heaven's Wheel Armor and a vast amount of her weapons, claiming that, if her friends are to be killed, at least she'll avenge them by making Evergreen suffer to the death. This reveals Evergreen's bluff, and the girls are turned back to normal, with Laxus enraged.

Laxus angrily wonders why Evergreen lost, and Freed, having said that either he or Bickslow should have confronted Erza, says that, with the hostages freed, the game is over. Laxus intimidates him with a lighting attack and states it's not over, telling Freed not to chicken out now, as he'd have no place in his guild for such weaklings. Back at Fairy Tail, the depetrified girls are seen talking with the others in an atmosphere which gets more and more relaxed. However, such relax is broken by the former communication from Laxus, through the use of Freed's enchantments, that, to keep the game from ending, he has activated the Thunder Palace, which will activate in an hour and ten minutes.

This greatly shocks Makarov, who falls ill, and is tended to by his "children". However, Mirajane calls them out and shows what the Thunder Palace is: an enormous amount of thunder-filled Lacrima orbs, capable of creating a lighting storm strong enough to destroy the whole town of Magnolia. Bisca Mulan Requips a sniper rifle and takes down one orb, but is then electrocuted and knocked unconscious through the Organic Link Magic cast on the orbs, which makes everyone who attacks them feel the blow as well. An enraged Natsu cries for Laxus to stop and tries to get out of Freed's barrier, while Laxus says that's a battle, and won't be over until one side is obliterated. Levy suddenly appears, saying that, due to Freed's Magic being written, she might be able to find a way to nullify the barrier, allowing Natsu and Gajeel to go after Laxus.

Lucy and Loke: The Unbeatable Tag Team
While Levy works to decipher the Rune Magic in order to nullify the barrier, Laxus angrily orders Freed, who believes they have gone too far, to take care of Cana and Juvia, to which he reluctantly agrees. Erza is tricked by Evergreen into entering a male bath, believing Laxus to be there. Cana and Juvia are seen searching around for Laxus, while Lucy and Happy try thinking of a way to evacuate the town without scaring the citizens. In that moment, Lucy is assaulted by Bickslow's dolls, being saved from their beams at the last moment by Happy.

Bickslow appears on top of a nearby building and, having exchanged words with Lucy, has his dolls start attacking her again. Lucy summons Sagittarius, who destroys Bickslow's dolls. Despite initially feigning despair, Bickslow reveals that the building he's standing on is a toy shop, and his souls take on new bodies and attack Sagittarius, forcing the celestial spirit to retreat and then steal Lucy's other keys, rendering her helpless before their subsequent Baryon Formation. However, Lucy is saved by Loke's sudden arrival, with the Celestial Spirit having forced open his gate to save his beloved owner. The two ready to fight Bickslow together.

After Loke and Bickslow have exchanged words, with the latter stating that he knew Loke was a Celestial Spirit, the battle continues: Bickslow's dolls attack them, but Loke takes them on, and Lucy, with Happy's help, rapidly reaches Bickslow and manages to hit him with her whip. Bickslow resolves to remove his visor, revealing his Figure Eyes, which allow him to turn the ones who look in his eyes into dolls and to control their souls. This forces the two to close their eyes, leaving them open for Bickslow's dolls to attack them.

When Loke suggests Lucy send him away to summon forth Horologium and shield herself, Lucy answers that she, aside from not having her keys anymore, trusts him, which prompts Loke to use his Lion Brilliance, emitting intense light from his body, which forces Bickslow to momentarily close his eyes. Lucy takes advantage of the moment as she's told by Loke, using her whip to grab Bickslow's neck, allowing Loke to defeat the second member of the Thunder God Tribe with his Regulus Impact, stating that Lucy granted him strength with her love.

After the battle, Loke gives Lucy back the keys stolen by Bickslow's dolls. Meanwhile, Levy manages to decipher Freed's enchantment, and opens a path to the outside for Natsu and Gajeel, who are ready to join the battle. Meanwhile, Mirajane runs into the injured Elfman and, as she helps him on his feet, starts crying and begging for his forgiveness for never fighting alongside him and the others, to which he says her smile after battles is more than enough. Cana and Juvia meet Freed and, while running after him, are trapped inside one of his barriers, with this one allowing exit only once one of them is unable to fight.

Juvia turns herself into water and, unwilling to attack Cana, strikes the Thunder Palace's orb above her, severely injuring herself but dispelling the barrier. She states that she didn't want to injure a comrade, wanting to be acknowledged as a member of Fairy Tail, which prompts Cana to tearfully recognize her as such. Juvia passes out, with Freed surprised by the fact that she chose a comrade over herself, and Cana readies to fight him while tearfully screaming out his name in anger.

Satan's Descent: The Demon Mirajane
Natsu is shown searching around for Laxus, while Gajeel instead is seen communicating through a Shikigami with an unspecified "Master", stating that, once he's done with Laxus, he'll also have to take care of Natsu and the whole of Fairy Tail. Meanwhile, Elfman and Mirajane reach the place where Cana is fighting Freed, and witness the former's defeat at Freed's hands. As Elfman readies to fight, Freed claims that, having already lost to Evergreen, he has no right to continue the game, before starting to torture him with his Dark Écriture, with Mirajane crying and begging him to stop. As Freed readies to finish Elfman off with Dark Écriture: Death, Mirajane remembers Lisanna's death, and, not willing to let another beloved sibling of hers die, manages to use her Take Over, Satan Soul. She then attacks Freed, and readies to engage him in an aerial battle.

He uses Dark Écriture: Wings to enable him flight and evade Mirajane's claws. She turns her head, looks at him angrily and speedily charges at him once more, this time managing to claw him twice. Mirajane vows that she will eliminate Freed. She casts Darkness Stream and sends tendrils of Darkness Magic his way. Freed attempts to evade a couple, but still gets hit by Mirajane herself. She kicks him in the gut and then claws him relentlessly. Freed flies away and Mirajane gives chase behind him. Freed decides that he has no choice and that only a Demon can master a demon. He casts Dark Écriture: Darkness on himself so he may become a demon. Their fists meet, the Magic Energy released destroying the ground around them, and they proceed with hand-to-hand combat. It is Mirajane who has the upper hand for a while. Their darkness-charged fists and feet clash for a short amount of time until Freed is overpowered and they crash into a cave. In the cave, Mirajane attacks him with Evil Spark. The electrocuted Freed is overwhelmed by Mirajane's power but vows that he cannot lose. He uses Darkness Breath, a tornado of dark energy, against Mirajane. They are later both out in the sky again. Freed follows up with Darkness Flare Bomb that sends Mirajane flying into the river.

Much to Freed's surprise, Mirajane gathers the water of the river around herself. Freed wonders in shock as to how much Magic Power Mirajane actually has. She casts Evil Explosion and throws the whole river at Freed. Mirajane quickly follows up with more punches and kicks. She casts Soul Extinction on him and blows him away, sending him down to the ground. His Darkness Spell has worn off and Freed is back to his original form. Mirajane, unmerciful, punches him and pins him to the ground. Freed thinks that he can't possibly defeat Mirajane with her powers like that and he's going to be killed. However, just as Mirajane is about to deliver the final blow, she stops her fist from connecting with Freed's face and reverts to her original form.

She once more remembers the time Lisanna "died" and how she still managed to smile. She asks him if he thinks the battle is meaningless. Freed asks her if she's pitying the defeated and yells for her to finish it. She tells him that they're all allies, fellow members of the same guild that smile together and laugh together. Freed insists that he only has one ally: Laxus. Mirajane tells him that that's not true and that he must have realized. She thinks that it's not a bad thing to cling to a single person but there're a number of people all around him connected to one another.

Momentarily, Freed remembers moments in the past when the Fairy Tail Mages were really friendly with him. Mirajane takes his hand and tells him that when he reaches out, there's always someone right there. She states that it's when people realize how lonely it is on their own that they start to become kind, which causes Freed to start crying. In his sniffing, he tells her that he didn't want to do any of that and Mirajane comforts him by saying she knows. With a smile, she tells him that they should all enjoy the Harvest Festival next year.

With Freed's defeat, only Laxus remains to face Natsu, Gajeel, Erza and Mystogan.

Clash at Kardia Cathedral
At Fairy Tail's building, Levy is thinking about what should be done while Porlyusica shows up, demanding to see Makarov. Once before the unconscious Master, she tells Levy to bring Laxus there, as Makarov hasn't got long to live, with tears in her eyes, much to Levy's extreme shock and dismay.

Meanwhile, Laxus is reminiscing about his younger days inside the Cathedral. He remembers one debate he had with Makarov, in which he confessed that he was fed up of being recognized as the "Master’s grandson", scolding Makarov for having expelled his father, Ivan Dreyar. Ivan had been expelled for bringing harm to his fellow guildmates, but Laxus had been unforgiving and threatened to leave Fairy Tail to join his father's guild. Before leaving, Laxus swore that he would one day be stronger than Makarov. Laxus then returns to the present, in which he castigates himself for thinking these thoughts. As he's thinking about such things, Mystogan makes his appearance. Laxus is happy to see him, being willing to fight him to decide who's the strongest Mage in Fairy Tail while Mystogan demands that Laxus deactivate the Thunder Palace. They get into an argument on who is stronger and Laxus starts to refer to him as "Another-", which makes Mystogan attack. Mystogan inquires of his source, and Laxus states that he may reveal it, if he is defeated. The battle officially begins and Mystogan is the one to make the first move.

Mystogan proceeds to use his Skyscraper spell on Laxus, who manages to soon reveal it to be an illusion and breaks it afterwards. The two continue exchanging spells without managing to hurt one other. Suddenly, Natsu and Erza appear, surprising Mystogan and Laxus takes the chance to strike him with his lightning, damaging his mask. Under it, Mystogan's face is revealed to be the same as Jellal Fernandes'. They are both left speechless, and Mystogan apologizes to Erza saying he didn't intend for her to know. He claims to know Jellal, but to not be him. He apologizes once more and disappears, saying he will leave fighting Laxus to them.

Laxus sees this as another opening and hits Erza with a lightning bolt, which momentarily debilitates her. Natsu starts his battle with Laxus. They both deliver hits, but utterly ineffective ones. At this time, Erza recovers from the shock and decides to fight Laxus using her Lightning Empress Armor. She also demands Laxus cease his Thunder Palace, but he won’t; not until Makarov resigns, ignorant of the fact that Makarov is terminally ill. They continue attacking each other with their Lightning Magic. At this moment, Natsu asks Erza to let him fight Laxus, and she concurs in order to leave and destroy the Lacrimas. They both reconfirm their belief in each other, and Erza goes out and summons blades, wanting them and the spirits of her friends to help her. This silent plea of hers is felt by Gray Fullbuster, Lucy and Happy, all of whom run to get everyone. Gray, in particular, has a plan. He wants to find the telepathic Warren Rocko in order to call everyone in Fairy Tail and ask them to help Erza. With this in mind, he runs throughout the city.

Back at the Cathedral, Natsu and Laxus’s battle rages. They both attack forcefully, but no one seems to be gaining the upper hand. Furious, Laxus unleashes a big bolt of lightning, and Natsu is knocked down. Laxus still thinks of the Thunder Palace, and wonders why his grandfather hasn’t resigned yet. Natsu tells him not to be concerned as Erza will take care of it. Outside, Erza is summoning more and more blades, and this is visibly tiring her. However, she doesn’t let go; she continues summoning, ready to hit the Lacrimas. The battle between Laxus and Natsu rages on, with both beginning to get serious.

The Three Dragons
While the two clash, Erza requips all of her 200 swords, and a newly awakened Gray, through the use of Warren Rocko's Telepathy manages to coordinate his fellow guild members: all of them attack the lacrima orbs at once, destroying the Thunder Palace and suffering the electrical after effects, but surviving. Laxus, enraged, goes all out. He rapidly overwhelms Natsu, and is on the verge of killing him when Gajeel appears and saves him. The two reluctantly team up, but, despite their best efforts, they don't manage to severely hurt Laxus. Even their combination of Fire Dragon's Roar and Iron Dragon's Roar leaves the opponent unscathed, as Laxus suddenly reveals himself as a fellow Dragon Slayer, with lightning as his element. With the two opponents exhausted, Laxus, completely out of his mind, readies to annihilate the entire Magnolia Town with Fairy Law.

With Laxus readying the spell before Natsu and Gajeel's shocked eyes, Levy suddenly appears, telling Laxus that Makarov is on the verge of death and begging him to stop such madness, but Laxus instead smiles defiantly and laughs off the matter, stating that his chances of becoming Master have increased. He then proceeds to cast Fairy Law, but, much to his dismay, finds it incapable of hurting anyone in town. An injured Freed appears to explain that because, in his heart, Laxus still considers them comrades and Fairy Law only hurts those the caster considers enemies, his spell failed.

With Laxus unwilling to acknowledge that and remaining enraged, his fight with Natsu continues. While he's on the verge of finishing the boy off with Lightning Dragon's Heavenward Halberd, Gajeel uses his iron body as a lightning rod to draw the attack towards himself. With Laxus having used up almost all of his Magic power, Natsu bombards him with a barrage of attacks, and then manages to defeat him with Crimson Lotus: Exploding Flame Blade, putting an end to the Battle of Fairy Tail.

The Tearful Judgement and The Fantasia Parade
Everyone in town is shown unaffected by the battle and even oblivious of it, happily enjoying the festival. Porlyusica leaves the town, and Erza announces that Makarov's life isn't at risk anymore, to her cheering guildmates happiness. Laxus' sudden appearance shocks everyone, as the S-Class Mage demands to meet Makarov, with Erza hushing up those who want to stop him and showing him the way. Natsu comically confronts Laxus, but he shrugs the matter off by waving his hand, something which seems to positively impress Natsu and Erza.

Laxus proceeds to meet his grandfather in the nursery room. After a valuable lesson concerning what a guild is truly meant to be, and having told his grandson that all he wanted for him was to be happy, Makarov excommunicates Laxus, his tears reflecting the grief in his heart for having no other choice. Laxus leaves, thanking his grandfather for everything he has done for him. Having bid farewell to his Thunder God Tribe and having convinced them to remain in the guild, Laxus is seen watching the Fantasia parade from a distance.

His grandfather raises his hands up in the air with the index stretched, followed by all of Fairy Tail's members, a gesture from Laxus' own childhood, with the instance being shown, another Fantasia parade. This 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, Fairy Tail's former S-Class Mage walks away...

Gajeel is shown talking with the unspecified "Master" from before, it is revealed to be none other than Makarov's son and Laxus' father, Ivan Dreyar, Master of the Dark Guild Raven Tail. Ivan claims that Laxus' Dragon Slayer powers are artificial and stem from some Lacrima he implanted Laxus himself, stating he might take it back from him to make some money.

Later, at Fairy Tail, it's revealed that Gajeel is a double agent, who was tasked by Makarov into finding out Raven Tail's location, something he achieved. Thanking him for his help, Makarov states he won't let his son have his way and get his hands on Laxus.

Old Acquaintances
A week later, everything seems to have settled down. Laxus' excommunication came as a surprise for everyone and Makarov himself would have resigned his position to take responsibility for his grandson's crimes, had it not been for Freed, who told him that Laxus would have felt bad if he had known. The Thunder God Tribe is starting to "make friends" in the guild, and Erza wonders about Mystogan's identity. The winner of Miss Fairy Tail is Erza, with Lucy coming second. Lucy can't get rid of the feeling someone is watching her.

While she's walking home, Lucy runs across the hooded man from before, the one who was following her, who's revealed to be none other than her father: having lost all of his fortune, he states he wanted to see his daughter. However, his true intentions are soon revealed, with him wanting to borrow 100.000 from Lucy in order to start a new activity. Lucy doesn't have that amount of money, and her father gets angry and shouts against her, prompting Lucy to send him away with tears in her eyes.

The day after, Team Natsu is leaving on a profitable job, when Lucy overhears some people talking about the merchant guild her father wanted to join having been taken over the by Dark Guild Naked Mummy. Lucy renounces the job with her team to go and save him, despite him being a terrible father.

Lucy reaches the place and rapidly gets rid of the Naked Mummy members through the aid of her Celestial Spirits, saving the hostages. However, her father is nowhere to be seen: he arrives after Lucy has saved the guild, having been forced to walk all the way there due to his lack of money. He thanks his daughter, and reveals that guild is the place where he first met her mother and where she got pregnant with her. He also states that her own name, Lucy, comes from the guild's sign, "LOVE & LUCKY", which at the time was missing the "K" in "LUCKY", thus reading "LUCY". The rest of Team Natsu suddenly appears, and Lucy leaves with them, with her father happy to see his daughter surrounded by friends and grown, and silently apologizing to his deceased wife for what he did.

Later, in Naked Mummy's headquarters, the one who lead the assault to the merchant guild is beaten up by Gatô, who needs the cash to pay their senior Dark Guild Oración Seis, with his fellow member Zatô stating they'll have to find another way.

Meanwhile, in another place, the first member of the infamous Oración Seis, Cobra, appears, stating that it's time for the light to be crushed.

Anime Differences

 * Reedus's fight against Freed is expanded where he tries to use a decoy of Lucy to escape. In the manga, we just see the aftermath of the fight.
 * When Laxus tells of how Thunder Palace will be activated, enchantment symbols make up a skull that he talks through. In the manga however, dozens of enchantment displays used, each with a skull with a lightning bolt.
 * The fight between Mirajane and Freed is extended.
 * The final battle of Natsu and Laxus took place completely in the cathedral in the manga. In the anime, it moves to the roof of the building and finishes there.