Phantom Lord arc

The Phantom Lord arc is the fifth story arc of Fairy Tail.

After completing the Galuna Island mission, Team Natsu returns home to see their guild building damaged by giant iron rods. They quickly find out it was a rival guild called Phantom Lord who committed the act and soon, the two guilds find themselves against one another in an all out war.

Declaration of War
Upon arriving back at Fairy Tail, Team Natsu finds the guild impaled by numerous giant metal rods. Mirajane tells them that Phantom Lord was behind the attack. The guild members are all in the basement, with Makarov welcoming Team Natsu back as if nothing happened. Natsu is upset that Makarov is just ignoring what happened, but then Makarov reminds them that they went on an S-Class mission without his permission. He hits Natsu, Happy, and Gray on the head but he spanks Lucy, doing the latter action a second time after Natsu continues to show his anger towards Phantom.

Later, Lucy returns home only to find the rest of her team already making themselves at home. Erza says that since Phantom attacked, they may know where each of the guild members live so it would be better to say with someone else. She also learns of Erza, Natsu, and Gray's past a little when Erza mentions that they can take a bath together like in the old days. While staying over they discuss about Phantom Lord and their long-term rivalry with Fairy Tail. Given that wars against other Guilds aren't allowed, they choose not to start anything, since Phantom and Fairy Tail have about the same amount of power: both of their Guild Masters belong to the Ten Wizard Saints, Phantom has the elite Element 4 team, which is stated to be roughly equivalent to Fairy Tail's four S-Class Mages, and also Gajeel Redfox, considered the Guild's strongest member, who's a Dragon Slayer just like Natsu, with his element being Iron.

In the meantime, in Phantom Lord's base, Gajeel himself appears, enjoying his meal (composed of different metal parts) and telling his Master that he left Fairy Tail another present besides the destruction of their building. Back at Magnolia, the townspeople and Fairy Tail stare in shock at Fairy Tail's Shadow Gear team, whose members got beaten badly and are crucified to a tree, with a Phantom tattoo placed on Levy McGarden's stomach.

Makarov arrives on the scene and, now serious, says that it was okay for Phantom to destroy their building, but that now they have gone too far, attacking his children. He crushes his staff in rage, and officially declares war between the two Guilds.

Payback
With Lucy remaining at the Guild to watch over the injured Shadow Gear, the rest of Fairy Tail attack Phantom Lord’s base in retaliation. The Element 4 are nowhere to be seen, and neither is Gajeel, something which easily grants the upper hand to the invading Guild. The latter, however, shows up, wondering whether he should join the fray. Somewhere else, Lucy, who has left the Guild and is walking through town, is rapidly reached by two members of the Element 4, Juvia Lockser and Sol, and, having been rendered unconscious, is kidnapped.

Back at Phantom Lord’s base, where the battle rages on, Gajeel finally joins in, and starts fighting Elfman. However, their brief confrontation is interrupted by Natsu, who goes on to fight Gajeel himself. In the meantime, Makarov has reached the second floor of the building and readies to confront Jose. However, Phantom Lord’s Master is revealed to be using a Thought Projection, with which he also shows Makarov an unconscious, captive Lucy. Shocked by this, Fairy Tail’s Master is caught off guard by Element 4 Aria’s Metsu spell, which deprives him of his Magic and heavily damages him, forcing Fairy Tail to retreat, carrying with them their injured Master.

Natsu, however, learns of Lucy’s location, Phantom Lord’s headquarters, and readies to reach the place. There, a prisoner Lucy, much to her dismay, is told by Jose that she’s the main reason for the attack on Fairy Tail, as her kidnapping was ordered by her father, who wants her back.

Having kicked Jose in the groin with a trick, Lucy jumps from the cell she’s held in, several dozen meters from the ground, knowing that Natsu will save her, something which happens, with the Fire Dragon Slayer catching her before she hits the ground. The two of them hurry to return to Fairy Tail, with an enraged Jose saying that he’ll make Lucy pay, and the girl feeling responsible for what happened to her Guild.

Back at Fairy Tail, everyone is readying for a possible confrontation with Phantom Lord again. Lucy, still seeing herself responsible for what happened, is comforted by her comrades. Cana Alberona is unsuccessful in finding out where Mystogan is, and Laxus Dreyar, via a communication lacrima, refuses to help his guildmates out, laughing the matter off.

The quiet suddenly ends when Phantom Lord’s headquarters are seen moving in the direction of Fairy Tail on large mechanical legs. Once they’re near enough, Jose, still enraged, orders the firing of the Magical Convergent Cannon - Jupiter. Erza, using her Adamantine Armor, manages to stop the blast, but is heavily injured in the process. Jose demands Lucy be handed over, but all of the Guild angrily refuses to give up a comrade, and Phantom Lord’s Master proceeds to say that, in that case, they’ll fire a bigger and stronger Jupiter in 15 minutes.

As Fairy Tail members start fighting against the Shades Jose summoned, Natsu, with Happy’s help, readies to enter Phantom Lord’s headquarters and deactivate Jupiter. Lucy, who would like to fight too, is put to sleep by Mirajane and entrusted to Reedus Jonah, who must carry her to the Guild’s secret hideout. Mirajane, having taken on Lucy’s appearance, readies to act as a decoy.

Raging Fire Battle: Natsu vs Totomaru
Natsu, having failed to destroy Jupiter from outside, under Happy's advice decides to try from the inside, entering the cannon itself. This leads the two of them to the chamber containing the large lacrima likely empowering the weapon. However, as he tries to destroy it, he runs into Totomaru, the member of the Element 4 employing Fire, who displays the ability to control all the fire in the area, even Natsu's.

Their fight rapidly reaches a stalemate, since Natsu can eat Totomaru's flames and his flames can't reach Totomaru. Natsu then tries to play a cheap trick by pretending to use his Fire Dragon's Roar, and instead just spitting at his opponent. This greatly angers Totomaru who decides to use his Orange Fire, which is a smelly flame that affects Natsu greatly due to his strong nose. Later, Totomaru pulls out his sword to attack Natsu but Natsu manages to dodge and gets a lucky shot by making his flaming big enough to attack Totomaru even if it is being controlled. The Fire Dragon Slayer subsequently manages to gain full control over his flames, rendering Totomaru unable to control them, and destroys the lacrima crystal, preventing Jupiter from firing anymore. This greatly freaks out Totomaru, since he didn't know that there was such a strong Mage left in Fairy Tail.

Just as Natsu is starting to gain the upper hand, Jose decides to use his strongest weapon, turning his Guild's building into a gigantic, robotic Mage, the Super Mage Giant Phantom MK II , which, being a vehicle, gives Natsu motion sickness. Totomaru takes advantage of this and tries to finish Natsu off with his strongest spell Rainbow Fire, but he's frozen in a block of ice by Gray and then thrown up in the sky by Elfman, the two of them having arrived to help Natsu.

The Awakening of The Beast: Elfman vs Sol
A bigger threat than the Jupiter cannon draws nearer, with the gigantic Mage robot starting to cast the Abyss Break spell. The members who infiltrated the robot search around for a way to stop it. Mirajane, still donning Lucy’s appearance, is shocked to hear that Elfman is amongst them, being worried for him. To end the suffering of her guildmates, she shows herself to Jose, claiming to be Lucy, willing to surrender and turn herself in. Jose, however, easily sees through her deception. In the meantime, Elfman runs into Sol, and tries to get the answer on how to stop Abyss Break out of him.

Mirajane is caught by the robot’s gigantic hand, with Jose claiming that he’ll crush her for trying to deceive them. Inside the robot, Elfman and Sol confront each other. During their battle, Sol keeps bringing up Lisanna, Elfman's younger sister, whom he accidentally killed during a failed full body Take Over attempt, to taunt him about being weak. Despite Elfman's effort to attack Sol, he still gets overwhelmed, and decides he has no choice but to try a full body Take Over once again. This, however, fails when he remembers Lisanna's face, and he receives a massive attack that sends him through a wall. There, he sees his other sister Mirajane, who has been captured by the gigantic robotic Mage and is on the verge of being crushed, crying. This gives Elfman the reason he needs to succeed in his intent: he manages to activate his Beast Soul: Full-Body Take Over, and he proceeds to quickly defeat Sol with a barrage of angry punches.

Elfman then rushes towards Mirajane and saves her, revealing that he has retained his senses, and that he didn't lose control like last time, when his attempt to full body Take Over resulted in Lisanna's death. Mirajane, however, doesn't blame him for what happened, and reminds him that they both promised to continue living for Lisanna's sake, something which makes Elfman cry out in joy. Mirajane notices that now the gigantic Mage is casting Abyss Break at a slower rate, and realizes that the spell is powered by the Element 4: since two of them have already been taken out, defeating the remaining two will stop the spell. While Fairy Tail members continue to battle, Natsu runs into Element 4's top member, Aria, and the two ready to fight.

Ice and Water: Gray vs. Juvia
Gray reaches the outside and wonders why it is raining, there he meets Juvia, the member of Element 4 controlling Water. Gray tells her that even if she is a girl, he won't go easy on her. Juvia quickly blushes and tries to walk away saying she has lost, greatly surprising him.

Juvia is growing more and more fond of him at an impressive rate, and when Gray approaches her asking Juvia to stop the robotic Mage, she decides that she must make Gray hers. She surrounds Gray with her Water Lock, accidentally opening the wound he got from Lyon Vastia. As a panicking Juvia tries to release him, Gray frees himself by freezing the water, something which strikes Juvia. Gray, after removing his shirt, greatly shocking her, attacks her with Ice-Make: Lance, but is surprised to see that Juvia's body is made of water and capable of reforming. A reticent and love-confused Juvia is forced to exchange blows with Gray. She then proceeds to say that, to save his life, he should hand over Lucy. Gray replies that he'll never give her up, not even if he dies, which makes Juvia mad, prompting her to start seeing Lucy as a "rival in love", stating that she'll never forgive her, and to make the water composing her boil, much to Gray's dismay.

In this state, she moves around fast enough to prevent Gray from casting freely, and even manages to melt his Ice-Make: Shield. With no other choice left, Gray decides to freeze Juvia's own water, even if its boiling, something he succeeds at, but accidentally grabbing her breast in the process, which prompts him to release her from the ice. This last act strikes her, Juvia calms down and says that she can protect him better than Lucy, and even tries to confess her love for him. But before she can say anything else, Gray comments that the continuous rain falling on them is depressing. This reminds her of her sad past, when she was always refused by others because of the rain which always surrounds her, and she flares up again, continuing to attack Gray while trying to convince herself that she doesn't need love.

Gray, however, stating that he'll never lose to the likes of Phantom, freezes her water again, freezing the rain itself in the process, and defeats her with Ice-Make: Geyser. With her defeat, the sky clears, allowing Juvia to see it for the first time, which prompts tears to appear in her eyes as she states that it's beautiful. Gray jokingly asks if she wants to continue the battle, which prompts her to faint in a comedic way, her eyes shaped like a pair of hearts. With this, the third member of Element 4 is defeated, slowing down the Abyss Break further.

Clash of the S-Class: Erza vs Aria
As the Fairy Tail members fighting Jose's Shades comment that Abyss Break's cast has gotten once again slower, Mirajane and Elfman reach Gray and inform him that defeating the Element 4 will stop the robot Mage.

Natsu is shown having difficulty fighting Aria, since each of his attacks just see the opponent turn himself intangible, while Natsu gets badly beaten by the invisible attacks created by Aria's Magic Airspace. Just as Natsu is about to have is Magic drained by Aria's Metsu like happened to Makarov, Erza arrives in time to save him and take over his fight. With both "Salamander" and "Titania" before him, Aria resorts to use his full power and takes off his blindfold, with Gray, Elfman and Mirajane discussing about it at that very same time, stating that, if they were to encounter Aria, they should defeat him before he removes his blindfold.

With no more limits on himself, Aria activates his strongest spell, Zero, which he claims to be the "Airspace of death". Aria's easiness to take away human lives enraged Erza, who charges through his spell and, much to Aria's dismay, slices through it, before requipping her Heaven's Wheel Armor and defeating the last member of Element 4 with Blumenblatt. After his defeat, she defiantly claims that there is no way their Master could have lost to him.

The Dragons Combat: Natsu vs Gajeel
With all of the Element 4 defeated, Abyss Break is stopped, and the gigantic robotic Mage collapses, much to Fairy Tail’s enthusiasm. Erza is shown falling to the ground out of exhaustion, with Natsu rushing to her side. Jose is enraged by the fact that all of the Element 4 were defeated. As he asks for Gajeel’s whereabouts, his Guild’s ace appears before him carrying a beaten Lucy, whom he took away from Fairy Tail’s hideout after defeating Reedus, as discovered by Loke. A pleased Jose announces through the loudspeaker to the Fairy Tail members that Phantom succeeded in recapturing Lucy, as he forces them to hear the girl’s screams of pain, and then states that there’s nothing left to do but to eliminate them all. He grants a huge boost in power to his Shades, which start overwhelming the exhausted Fairy Tail members. Having entrusted the prisoner Lucy to Gajeel, Jose readies to take care personally of the "insects" who invaded their Guild.

Inside Phantom’s collapsed robot, a downed Erza tells Natsu to save Lucy and the Guild with the hidden power he holds within himself, which surpasses her own. Spurred, Natsu then rushes to the rescue. Elsewhere, in Porlyusica’s house, Makarov is shown finally awakening, much to the healer’s dismay.

Gray, Elfman, and Mirajane manage to find a worn out Erza and are glad to see her okay, but then Jose himself arrives and prepares to finish them off. He quickly takes out Gray, Elfman and Mirajane before proceeding to fight Erza, acknowledging her as a "woman worth killing".

Meanwhile, Gajeel is spending his time by throwing knives at Lucy, who is bound to a wall, nearly hitting her a couple of times, much to his comrades' dismay and concern. Lucy starts lecturing Gajeel, stating defiantly that, if something were to happen to her, her comrades would avenge her and make Phantom cower in fear. This prompts Gajeel to throw one more knife at her, this time bound to hit her. However, Natsu suddenly shows up, covered in flames, breaking through the wall, and saves Lucy, grabbing the knife with his teeth, and subsequently proceeds to attack Gajeel. The two of them start battling while Happy sets Lucy free of her restraints, and says that he's never seen Natsu this excited.

Gajeel rapidly gains the upper hand due to his Iron Dragon's Scales, which drastically increase both his offense and his defense. Having exchanged many blows, Natsu's Fire Dragon's Roar and Gajeel's Iron Dragon's Roar clash. Natsu is shown injured by Gajeel's metal scraps, but, as his opponent mocks him, a cut is shown opening on his iron forehead as well, showing that Natsu did manage to hurt him. The two then ready to fight seriously.

As the battle below rages on, with Fairy Tail slowly being overpowered by Jose's Shades and the building receiving heavy damage, Natsu and Gajeel appear to be evenly matched, but then Gajeel eats some of the metal floor to replenish his stamina and strength, and starts overwhelming Natsu. Lucy, in a desperate effort to get Natsu some fire to consume, summons the only key she has left after her kidnapping, Sagittarius, but she's told that he can't produce fire. Gajeel then slams Natsu across the wall, and throws him on the ruined hall's edge, where he sees Fairy Tail's building collapse.

Natsu reminisces his first days in Fairy Tail, when he got to meet all of his guildmates for the first time and started liking the Guild. He gets on his feet again. Lucy would like to tell him to stop, in order to prevent him from injuring himself more, and to hand herself over, but Happy comments Natsu isn't done yet. Despite this, the exhausted Natsu still gets a brutal beating from Gajeel. Just as the Iron Dragon Slayer is about to finish Natsu off, Happy shouts out in despair that Natsu is too tired from his previous fights, but if he had some fire to eat he could heal up and finish off Gajeel. This makes Sagittarius realize why Lucy asked him if he could produce fire, and he states that while he can't make fire himself, he can help generate some. He then shoots at a machine with his arrow and manages to makes flames for Natsu. Natsu rapidly consumes the flames to heal up, and thanks Lucy for her help.

Gajeel then charges towards him, but Natsu now has the strength and determination to fight back and overwhelm him. Having struck him numerous times, he uses Crimson Lotus: Fire Dragon's Fist to finish Gajeel off and to destroy Phantom's building further, just as they destroyed Fairy Tail, stating that now they are even before collapsing from exhaustion. As the building they're in collapses, Lucy and Happy escape through the use of Happy's Aera, with Natsu stating that he'll reach them later, being "too tired to move a muscle".

Final Judgment: Makarov vs. Jose
Meanwhile, Erza continues her battle with Jose, but is unable to lay a hand on him, and gets easily overwhelmed and then captured by his Darkness Magic, with Jose stating that he left Makarov alive just to have him die in total despair later, after his Guild was destroyed and his precious "children" killed, and then proceeding to tell Erza the reason behind the attack on Fairy Tail and Lucy's kidnapping.

He states that back when Guilds were being set up, Phantom Lord was at the top and recognized all over the country, but then Fairy Tail appeared and started to grow, until its name and members were eventually recognized as equal to them. He then says that Lucy's father gave them a job to retrieve his daughter, but he plans to have her family surrender all of their fortune to him before returning Lucy to him. Erza laughs and says that is useless, since Lucy is a runaway and a dear comrade to them, and that his plan will never succeed. Just as Jose is about to crush Erza, she gets saved in the nick of time by the appearance of the newly revived Makarov. Fairy Tail's Master readies to confront his old rival.

Back at Porlyusica's place, the old healer looks on angrily, saying Makarov rushed in like a fool and will likely get killed. Just then, she notices Mystogan sitting quietly not far from her, who asks her for apples, and she realizes that the reason Makarov managed to heal so quickly was because the mysterious S-Class Mage gathered his scattered Magic power. She proceeds to lecture him for not joining the battle and helping out his comrades, but then the wind starts blowing and scatters numerous flags with Phantom's emblem on them around. Porlyusica realizes Mystogan did more than enough by taking out all of Phantom's subdivisions single-handedly, and the two remain still, discussing the situation enigmatically.

Back at Phantom's ruins, Makarov orders everyone to get away, since he is about to start a fierce battle, which in fact subsequently makes the sky and earth tremble, as the two Wizard Saints clash with each other, each managing to injure the other. Lucy and Happy, who come to Natsu's aid, wonder what is going on, and Natsu instantly realizes it's Makarov's doing. Both Guild Masters manage to injure the other, but then Makarov tells Jose to back down before he counts to three. He then grows larger and starts the countdown, generating light in his hands, but Jose refuses to bow and insults his opponent. With the three seconds passed, Makarov activates the spell Fairy Law, prompting a gigantic aura of light to appear from Phantom's building, shaking the sky itself.

The light takes out all of Jose's Shades without doing damage to any of the Fairy Tail members. Jose is defeated by the attack, looking like a broken up statue who has lost all life, as well as the war. Just as the victorious Makarov is leaving, Aria shows up from behind him, hoping to deprive Makarov of his Magic again, but Fairy Tail's Master doesn't fall for the element of surprise this time, and easily defeats Aria with one punch. He then leaves, telling Aria to take his Master away with him and disappear before he changes his mind about not informing the Magic Council.

The war between Fairy Tail and Phantom Lord finally comes to an end, with everyone cheering and Lucy joining her guildmates. Elsewhere, Natsu and Gajeel have one final chat and they manage to learn that both their Dragons disappeared on the same day, and wonder if there is some connection. Just as Natsu is leaving, Gajeel says that the next time they meet he will win, which Natsu doesn't care about. Outside, where the whole of Fairy Tail is gathered, Lucy feels guilty for what happened to everyone, but then team Shadow Gear appears and tells her that she is not to be blamed.

The Master then tells them that the war was not caused by anyone, no one fought alone, and that Lucy is a member of Fairy Tail as well as a member of their family, which makes her cry tears of emotion and joy. Just as everyone is about to celebrate, Makarov remembers that he will likely be reprimanded by the Magic Council for overdoing things, and starts crying as well, much to a surprised Erza's comedic dismay.

Lucy's Resolve
Following the end of the war, the Council's army arrives to learn what happened. They spend a week questioning every member, before momentarily leaving. The whole thing is reported by a letter Lucy writes to her mother, as the girl thinks back to the strained relationship with her Father.

All the guild members start reconstructing their building, with Natsu and Gray continuing their usual competitions and Juvia secretly spying on Gray. Loke then returns and asks Natsu to return Lucy's keys, which he went searching for and eventually found, to her. Natsu, Gray, Happy and Erza arrive at Lucy's house but find that it is empty. Happy then opens up a cupboard and a bunch of letters fall out. Everyone notices that the letters are all addressed to her mother, and then find a note saying she is going home, making them think she is leaving Fairy Tail. The girl is seen on a train, a resigned expression on her face.

Lucy arrives home and the servants all greet her with a teary welcome, and are glad that she is safe. Having been dressed up formally, she then meets her father again, who coldly welcomes her back, reprimands her leaving and speaks about her arranged marriage, but Lucy stops him and tells him that she just came back to say that she's leaving her family for good, and that her true family is Fairy Tail. She also says that if he does anything to their Guild or her friends again, he will be considered an enemy. Despite coming from a rich family and having affectionate memories of her deceased mother and the caring servitude, what she really wants is a place where she is respected for who she is. She then leaves and pays a visit to her mother's grave to lay flowers. She is surprised to see her teammates there, who followed her. She proceeds to clear up the misunderstanding and says that she only came to visit her mother after so long. They are also surprised to see how much land her family owns.

Elsewhere, Makarov's trial is taking place, and he falls asleep in the middle of it. The Council reaches the decision that Fairy Tail is innocent, Jose is stripped of his title of Wizard Saint, and Phantom is disbanded, no longer being an active Guild. Makarov then meets up with Yajima, one of the councilors as well as an old friend of his and one of the main reasons behind the good outcome of the trial, who says that he can't keep protecting Fairy Tail from every accusation and that Makarov should consider retirement.

Back at the Guild, everyone is glad to learn that they can do jobs again, but the mood is ruined by the return of Laxus. He shows off his arrogance by insulting Shadow Gear and Lucy, and says that when he takes over the Guild he will remove all the weaklings before leaving. Lucy doesn't understand what he meant, but learns from Mirajane that Laxus is the grandson of Makarov, and that's probably the reason for which Makarov is putting off his retirement, so Laxus won't take over the Guild until he has gotten kinder and more considerate.

Erza then says that now Natsu, Gray, Lucy, Happy and herself should take on a job as a team, having accomplished many missions together. Everyone instantly cheers, since Fairy Tail's strongest team, Team Natsu, is now official.

At night, Makarov wonders about his retirement, but can't find a suitable successor. Laxus's heart isn't in the right place, Mystogan is too secluded, Gildarts is constantly gone, and Erza is too young and strict. He later receives a notice from Mirajane saying Team Natsu destroyed a town while doing a job, and realizes that he won't be retiring for quite some time.

Anime Differences

 * In his fight against Totomaru, Natsu originally just blasted Jupiter's core after powering up. In the anime, Natsu starts off by kicking Totomaru's sword into the core, cracking it, and then causes it to explode with his Magic.
 * Elfman's fight against Sol is extended with Sol using a new Magic that allows him to create statues of Lisanna, and then another one which allows him to cover Elfman in rock while he relives his younger sister's death. Said moment is also elaborated upon.
 * Lucy's recapture is shown, featuring a short fight between Loke and two of Phantom Lord's anime-only members, Boze and Sue.
 * Gajeel is much more brutal to Lucy in the anime: whereas in the manga he just threw knives at her, in the anime he actually beats her up before Natsu's entrance.
 * Natsu and Gajeel's fight is extended, with the two even battling in midair briefly.
 * Erza actually considers suicide as Jose is torturing her, very nearly using her Magic to drive a sword into her back.
 * Makarov doesn't bulk himself up during his confrontation with Jose as he did in the manga.