Phantom Lord arc

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

After completing the Galuna Island mission, Team Natsu return home to see their guild building damaged by giant iron rods. They quickly find out it was a rival guild called the Phantom Lord that cause the act and soon the two guilds find themselves against one another in 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 happens, 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 to her 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 Grays 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-Rank 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 so 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 in the town, is rapidly reached by two members of the Element 4, Juvia Lockser and Sol, and, having been rendered unconscious, is kidnapped.

Back to 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 the 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 dozens 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 she’ll make Lucy pay, and the girl feeling responsible for what happened to her Guild.

Back to 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 fiding 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 remains heavily injured in the process. Jose demands Lucy to be handed over, but all of her 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 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 subseqently 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 freaked 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, with 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 Fairy Tail 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 smash 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 she 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 smashed, 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 still has retains 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 been already 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.

The Flower that Bloomed in the Rain: 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.

Juvia surrounds Gray with her Water Lock, accidentally opened the wound he got from Lyon Bastia. As Juvia, panicked, 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 in 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 moved fast enough that Gray had a hard time casting a spell and even melt his ice shield. With no other choice Gray decides to freeze Juvia's water even if its boiling, which he succeeded but accidentally grabbing her breast in the process. Juvia calms down and says that she can protect him, and even tried to state her love for him but before she could say anything Gray says the rain is depressing and this reminds her of her sad past. Gray this time freezes the water again and manages to freeze even the rain. After Gray defeats her with his ice geyser, she loses and the sky clears allowing Juvia to see it for the first time, which she said is beautiful. Later Gray asks if she wants to continue which she quickly faints afterwards.

Clash of the S-Class: Erza vs Aria
As Natsu continues searching for a way to stop the abyss spell with Happy, he suggests fighting against Jose and then the whole thing will end. However Happy is against this since Jose has the same amount of magic power as their master and then starts losing hope, until Natsu reminds him that hes still here. When they enter a room they are greeted by Aria, leader and the air mage of the Element 4.

Natsu has difficulty fighting Aria since he can't reach him and gets a bad beating from his aerospace magic. Just as he was about to have his magic spread into the mind like their master, Erza arrives in time to save him and take over Natsu's fight. She tells Natsu to go on ahead since he is the only one who can defeat Gajeel. Aria then resorts to using his full power, and takes off his blindfold to release the other half of his magic. When Aria takes off his blindfold and opens his eyes, the Abyss spell reaches full power despite only having one member and Aria activates his deadliest spell, Zero. However instead of running away Erza charges into the spell and manages to slice the aerospace, before switching to her Heavenly Armor and finishing off Aria. After his defeat she says that their is no way their master can lose to the likes of him, before fainting due to her not making a full recovery.

With all 4 members defeated, the abyss spell disperses and Master Jose can only look on angrily. Unfortunately, Gajeel arrives back to tell him that he has found and captured Lucy thanks to his strong nose. With Lucy now captured and their mission complete, he releases more shade warriors and orders the destruction of the Fairy Tail guild and its members.

The Dragons Clash: Natsu vs Gajeel
Gray, Elfman, and Mirajane manage to find a worn out Erza and are glad to see her okay, but then Jose arrives and prepares to finish them off. He quickly takes out Gray and Elfman and proceeds to kill Erza.

Meanwhile, Gajeel throws knives at Lucy who is bound to the wall and nearly hit her a couple of times. Just as Lucy was lecturing Gajeel about being a coward, Gajeel throws another knife that was aimed straight at her, but she was saved by Natsu bursting from the floor below and catching the knife with his teeth. Natsu and Gajeel then start their battle while Happy frees Lucy and says that hes never seen Natsu so excited for a fight. At first Gajeel gained the upper hand since Natsu is worn out from his previous 2 fights and his attacks couldn't penetrate his steel defense. They then both use their Dragon roar and Natsu gets impaled with numerous metal shards. However Natsu manages to give Gajeel a cut just above his eye. Their fight then starts to be equal, but Gajeel then eats some of the metal floor to replenish his stamina and strength and easily overwhelms Natsu. Lucy realizing that Natsu can do the same if he eats some flames, but realizes that he can't eat his own flames and that she lost all her keys when she was first captured, except for her newly obtained Sagittarius. When she summons him she asks if he can produce fire but is shocked to learn that he can't and how useless she is. Gajeel then slams Natsu across the wall where he sees the Guild get destroyed and has memories of when he first arrived their.

Natsu can only look on helplessly and Lucy tells Natsu to stop and to let them have her, but Happy stops her and tells him that Natsu hasn't given up yet. Natsu manages to get back on his feet to continue his fight but still gets a brutal beating. Just as Gajeel was about to finish off Natsu, Happy shouted out 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 manages to eat the flames to heal up and thanks Lucy for her help. Gajeel then charges towards him with a steel sword hand but Natsu how has the strength and determination to fight back and overwhelm him. Natsu throws numerous attacks that easily overwhelm Gajeel then uses one of his strongest attacks to finish of Gajeel and destroy Phantom's guild just as they destroyed theirs and stating that now they are equal before collapsing from exhaustion. Lucy and Happy manage to escape but are forced to leave Natsu behind, though they both say its fine since this always happens and that he at least kept his promise.

Final Judgment: Makarov vs Jose
Erza still continues her battle with Jose but gets easily overwhelmed and then captured, and Jose then tells her his reason for attacking Fairy Tail and what he plans to do with Lucy.

He states that back when guilds were being set up Phantom was at the top and recognized all over the country, but then Fairy Tail was set up and started to grow until its name and members started to be recognized as equal to them. He then says that Lucy's father gave them a job to retrieve his daughter but he first plans to have her family surrender all of their fortune to him before returning her to him. Erza then laughs and says that its useless since Lucy is a runaway and that his plan will never succeed. Just as Jose was about to crush Erza she gets saved in the nick of time by the newly revived Makarov. Back at Porlyusica place, Porlyusica looks on angrily saying Makarov rushed in like a fool and will likely get killed. Just then she notices Mystogan who asks her for apples, and she realizes that the reason Makarov managed to heal so quickly was because he was the one who gathered his scattered magic powers. She then lectures him for not joining the battle but then a wind blows and scatters numerous flags with Phatom emblems and she realizes that did more than enough by taking out all of Phantom's subdivisions single handily.

Makarov orders everyone to get away since he is about to start a fierce battle and initiates a spell that makes sky and earth tremble. Lucy, Natsu, and Happy wonder what is going on and Natsu instantly realizes its the master and how strong he can be. Both 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, but Jose still refuses and Makarov activated the spell Fairy Law.

A huge beam of light shines down and takes out all of Jose's shade soldiers but did no damage to any of the Fairy Tail members. Jose then looks like a broken up statue who has lost all life after receiving full judgment, as well as the war. Just as Makarov was leaving, Aria shows up hoping to repeat the same process of scattering his magic like before, but Makarov didn't fall for the element of surprise this time and easily defeats him with one punch.

The war between Fairy Tail and Phantom Lord finally comes to an end with everyone cheering. 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 their is some connection. Just as Natsu was leaving Gajeel says that the next time they meet he will win, which Natsu doesn't care about. Lucy feels guilty for what happened to everyone but then, team Shadow Gear return and tells her that she is not to be blamed for anything that happened. The master then tells them that all that has happened was not caused by anyone, no one fought alone, and that she is a member of Fairy Tail as well as a member of their family, which makes her cry in tears.

Just as everyone was about to celebrate the master then remembers that he will likely get arrested for starting a war between guilds.

Lucy's Resolve
Following the end of the war, the Royal army arrives to know what happened, they question every member and learn of what happened and only takes the Master to stand trial. Back at Lucy's home she writes another letter to her mother and then thinks back to her strained relationship with her Father. All the guild members then start rebuilding the guild, with Natsu and Gray continuing their usual I'm better competitions and Juvia secretly spying on Gray. Loke then returns and asks Natsu to return Lucy's keys. 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.

Lucy arrives home and the servants all greet her with a teary welcome, and are glad that she is safe. She then meets her father again who discuss her plans with her arranged marriage, but Lucy stops him and tells him that she is 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 he will be an enemy. Despite coming from a rich family and having memories with her mother and the servants she doesn't care about any of that, what she really wants is a place where she is respected for who she is.

She then leaves and arrives at her mother's grave to lay flowers, and is then surprised to see her team mates who followed her. She then clears 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. Back at Magnolia, 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, and that Phantom is now disbanded and no longer a active guild. Makarov then meet up with Yajima who says that he defended him, but that he can't keep doing this and that he 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 and he says that when he takes over the guild he will remove all the weaklings. Lucy didn't understand what he meant, but learns that Laxus is the grandson of Makarov and that one reason he's putting off his retirement is so Laxus won't take over.

Erza then says that they should take on a job as an official team between herself, Natsu, Happy, Gray, and Lucy. Everyone instantly cheers since Fairy Tail's team is now official. At night Makarov wonders about his retirement but can't find a suitable successor. Laxus's heart wasn'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

 * We find out Bisca's magic is a Re-Quip style similar to Erza.
 * In the Totomaru fight, Natsu originally just blasted the Jupiter core after powering up. In the anime, Natsu kicks Totomaru's sword into the core cracking it. Then later hits it with his fire magic to cause the core to explode.
 * Elfman's fight against Sol is extended with Sol using a new magic that allows him recreate statues of Lisana. Plus covering Elfman in rocks while he relives his younger sister's death. Said moment is also elaborated upon.
 * Lucy's recapture is shown. Featuring a short fight by Loki against two of Phantom Lord's members.
 * Gajeel is much more brutal to Lucy in anime. Whereas in the manga he just threw knives at her. He actually beats her up before Natsu's entrance.
 * Natsu's and Gajeel's fight is extended, the two even battling in the air briefly.
 * Erza actually considers suicide as Jose torturing her. Very nearly using her magic to drive a sword into her back.
 * Marakov doesn't bulk himself up during his confrontation with Jose as he did in the manga.