A group from the Japan Liberation Front takes a hotel and its occupants hostage, including most of the Ashford Student council and a disguised Princess Euphemia. As such, Princess Cornelia cannot make a move against the hostage takers, which Lelouch realizes and takes advantage of. He mounts a rescue with Ohgi's resistance, using his knowledge of Euphemia to barter his way past Cornelia's blockade. As Lelouch speaks with the hostage takers, Suzaku sinks the floating hotel using the Lancelot. Using explosives set up by the resistance fighters, Lelouch derails any rescue efforts by the army so he can take credit for their rescue. Broadcasting publicly to the nation, he announces the creation and purpose of his Order of the Black Knights, "allies of justice" who will judge the world and protect the weak from "those with power".

Told mostly from Kallen's perspective, her rocky relationship with her biological mother is revealed. The Black Knights are sent on a mission to take out the drug "Refrain", and find themselves to be popular among the Elevens. Kallen's mother is found among the Refrain users, and is arrested following the Black Knights' destruction of the drug stockpiles. Kallen promises to have changed the world by the time she is released.

Cornelia and the Britannian Army heads to Narita, hoping to destroy the remnants of the Japan Liberation Front. Lelouch has his Knights follow her in the hope of capturing her alive so he can question her about his mother's death. As the Britannian forces close in on the Front's headquarters, Kallen utilizes her new Knightmare Frame, the Guren Mk-II, to cause a massive landslide that takes out much of the Britannian forces.

Zero and the core members of the Black Knights meet with Taizō Kirihara, one of the most powerful people in the Japanese underground and an acquaintance of Lelouch from his younger days at the Kururugi Shrine. Lelouch deftly displays his tactical prowess and wit before Taizō and reveals his true identity to the man to gain his trust and support. When Lelouch returns to Tokyo, Shirley informs him of her father's death, indirectly caused by Zero during the Battle of Narita.

Lelouch believes Shirley may have discovered his identity as Zero, so he and C.C. pursue her to Narita. Ohgi explores the battlefield of the previous night, discovering the wounded Villetta Nu left for dead out of sight. Lelouch encounters Mao, a young man who also has the power of Geass. Mao uses his mind-reading power to play on Shirley's insecurities, manipulating her into shooting Lelouch, but she falters at the last moment and C.C. sends Mao away temporarily. Since Shirley is being torn apart by grief and guilt, Lelouch uses his Geass to erase her memories of him.

An inauguration ceremony of Clovis' memorial art museum is being held, with Euphemia judging the art works. Lelouch agrees to help Kyoshiro Tohdoh's comrades rescue their leader and Shirley finds an old crumpled letter detailing her previous knowledge of Zero's identity. During the rescue mission, Lelouch convinces Tohdoh to join the Black Knights. The Lancelot appears and attempts to stop them, but Lelouch is able to predict its movements and plan a counterattack. When Tohdoh slices open the cockpit, revealing Suzaku within, Lelouch is shocked, having originally planned for Suzaku to become Nunnally's knight. He orders an immediate retreat as reinforcements arrive. Seeing Suzaku's bravery and creed, Euphemia announces to the media that he will be her knight.

As Euphemia knights Suzaku, Lelouch establishes the hierarchy of the Black Knights. Diethard Reid suggests assassinating Suzaku, but Lelouch has other plans for him. He launches a plan to disable and capture Suzaku and the Lancelot at a Britannia military base on Shikinejima. The plan almost succeeds, but Second Prince Schneizel el Britannia appears and orders his floating battleship, the Avalon, to bombard the island.