Based on the test results, Ruby, Weiss, Blake, and Yang form “Team RWBY”, and their school life beings. However, the four are not able to open up to each other just yet. Weiss, unaccepting that Ruby was chosen as team leader, appeals to the professor that she is more capable of the role, but is advised to be “be the best teammate.” On the other hand, Jaune had been chosen as the leader of “TEAM JNPR”, with Nora, Pyrrha, and Ren as his teammates. Feeling discouraged about his lack of skill and cowardness, he is possessed by the Grimm “Nightmare”.

With advice from Team JNPR, Penny, and Sun, Ruby’s party decides to try a new plan. Along with Jaune, who had acquired immunity toward the “Nightmare”, the four sneak into Weiss’ dream. Using the train they had rescued from White Fang, they were able to approach close to the center of the empire. Jaune, not being affected by the “Nightmare”, was able to move freely, releases the Sillies, the residents of the dream who were locked away by the empire, and succeeds in obtaining a new relic. Suddenly, a large number of little Weiss jumps out…

As Yang fights the statue of Nicholas, Jaune and the Sillies fight the statue of Jacques. The robot army that had been created from Weiss’s nightmare fight the deformed White Fang which had been created from Blake’s nightmare. While battles are held in various places, Nega-Weiss clashes with Nega-Blake. Weiss is overwhelmed but tries to confront Nega-Blake, raging with Faunus’ anger who were being continuously oppressed. On the other hand, Ruby reaches the core of the dream and attacks the briar that covers the “Nightmare” but it quickly goes back to its original form and she is unable to destroy it. As she gets flustered, she remembers the words Weiss had said in Ruby’s dreams.