Acnologia arrives at the island and begins to destroy it. Seeing the Black Dragon of Apocalypse, Makarov tells his guild members to run while he fights it, but the fairies wouldn't leave without their master and decide to fight alongside him. However, their efforts ended up being futile as Acnologia releases his Dragon's Roar, seemingly destroying the island and everyone on it.

For their preliminary trials, Juvia and Lisanna face off against Erza, while Elfman and Evergreen find themselves standing against Mirajane. Meanwhile, Natsu enthusiastically battles against Gildarts, with a series of flashbacks detailing how Natsu had never once been able to defeat him since childhood. Just when Natsu believes he has gained the upper hand, Gildarts unleashes an immense aura of magical power, prompting Natsu to surrender in fear. Gildarts teaches Natsu the benefits that fear has in order for him to grow stronger, and tells him that he has passed his preliminary trial.

After being defeated by Gray and Loke, Mest convinces Wendy to help him look for a secret he claims to be hidden on the island. Worried about Wendy, Charle arrives on Tenrou Island together with Pantherlily, who doubts Mest's claims of being Mystogan's disciple and suspects that Mest may not be a member of Fairy Tail. Meanwhile, Levy and Gajeel pass through the only route devoid of opponents, Elfman and Evergreen defeat Mirajane, and Juvia and Lisanna lose against Erza. For the second part of the exam, the remaining participants are instructed by Makarov to search the island for the grave of Mavis, Fairy Tail's first master, within six hours. During their search, Elfman and Evergreen encounter the black-haired youth, who unwillingly unleashes a wave of lethal magic, though Natsu arrives in time to save his friends.

Mest is revealed to be a member of the Magic Council sent to Tenrou Island to search for incriminating evidence against Fairy Tail and disband it. He, Wendy, Charle, and Pantherlily are attacked and defeated by Azuma, one of Grimoire Heart's most powerful members, the Seven Kin of Purgatory, who easily destroys the fleet of council ships Mest had summoned for support. Makarov attempts to cast Fairy Law to repel Grimoire Heart, but the dark guild's master Hades counters the spell with Grimoire Law. Makarov recognizes Hades as Purehito, his predecessor as the master of Fairy Tail.

Natsu is overwhelmed by Zancrow's God Slayer magic, which proves superior to his own Dragon Slayer magic. Upon finding Makarov badly injured during his fight, Natsu regains his resolve and defeats Zancrow by nullifying his own magical power, allowing him to eat Zancrow's flames and combine their power with his own. Meanwhile, Lucy, Cana, Gray, and Loke fight Caprico, another member of the Seven Kin, while Mirajane and Lisanna fight Azuma.

Azuma learns of Mirajane's former identity as "the Demon" and straps Lisanna to a time bomb so he can fight Mirajane at full strength. Not wanting to lose Lisanna again, Mirajane sacrifices herself to defend Lisanna from the explosion. The remaining members of Fairy Tail learn from the Seven Kin their true goal: to resurrect Zeref and bring about the World of Great Magic, where only wizards would thrive while the rest of humanity would be subject to hell on earth. Meanwhile, Ultear finds Zeref and, after a brief battle, successfully captures him.

Gildarts fights Bluenote while Fried and Bickslow, who returned to Tenrou Island together with him, help Levy, Lisanna, and Pantherlily to fight Rustyrose. Meanwhile, Azuma reveals to Erza that he has used his magic, the Great Tree Arc, to absorb the magic-giving energy of the island's giant Tenrou Tree, destroying it and draining the strength of all the Fairy Tail members on the island except Erza.

Erza makes Azuma promise to return her guild's magical power if she defeats him. She herself is nearly defeated when Azuma uses the Tenrou Tree's magic, but receives her second wind upon hearing Jellal's voice and, drawing power from the tree's magic, cuts Azuma down

Natsu Dragneel, Lucy Heartfilia, Gray Fullbuster, Erza Scarlet and Wendy Marvell square off against Hades, where they are easily struck down. However, Laxus Dreyar storms in to save the day.

With a supercharge from Laxus, Natsu turns into an ultra-powerful Thunder-Flame Dragon! But will it be enough to rival the unfathomable strength of the deepest of magics? And will an exhausted Fried and Bickslow manage to finish off the tenacious duo of Yomazu and Kawazu?

Natsu, Gray, Juvia, Elfman, Cana, Fried, Levy, and Mystogan's disciple Mest are selected to participate in Fairy Tail's annual S-Class promotion exam, and are instructed to choose a partner to accompany them during the exam.

The eight exam participants reach Tenrou Island, where they are each required to take one of eight routes that will lead to the next stage of the exam. Lucy and Cana take a route where they are required to fight against Freed and Bickslow in a battle that will determine which pair will be allowed to advance. Lucy and Cana fear they stand no chance against them, but Freed throws the battle by pretending to be weak against women in swimsuits, allowing Cana to defeat him. Meanwhile, Natsu takes the route he believes will lead him to fight against Erza, but is ecstatic to find Gildarts waiting for him instead.

Natsu attacks the black-haired youth to no effect, causing the youth to despair that Natsu is not strong enough to defeat him. The youth unleashes another wave of death magic against Natsu and disappears, but Natsu is protected from the attack by his scarf, which turns black. Despite the encounter, the participants continue their exam as usual. Meanwhile, the most powerful dark guild of the Baram Alliance, Grimoire Heart, approaches Tenrou Island in search of the youth, who is revealed to be the ancient wizard Zeref. Levy, who separates from Gajeel after arguing with him, is attacked by Grimoire Heart members Yomazu and Kawazu. Gajeel rescues her, and the two prepare to fight against their attackers.

Gajeel and Levy fight Yomazu and Kawazu, who reveal they are merely scouting the island for their more powerful guildmates. Though seriously wounded, Gajeel sends Levy to warn Fairy Tail of Grimoire Heart's attack and defeats the two scouts. While searching for Wendy together with Juvia, Erza finds Levy and lights a beacon signifying the exam's suspension and the enemy attack. Meanwhile, Charle and Pantherlily confront Mest over his identity.

Makarov is defeated and gravely wounded in his battle against Hades, which is sensed by the wandering Laxus. Meanwhile, the other members of Fairy Tail battle Grimoire Heart's army. Joining the battle are the Seven Kin of Purgatory, each of whom possess an ancient form of magic called Lost Magic. Natsu faces off against Zancrow, one of the Seven Kin and a "God Slayer" who can create black flames Natsu is unable to eat.

Elfman and Evergreen are overwhelmed and defeated by Rustyrose's Ark of Embodiment, which gives him the power to create anything from his imagination. Meanwhile, Loke recognizes Caprico as the celestial spirit Capricorn, and that he has the power to take control of humans. He sends Lucy, Gray, and Cana away while he fights Caprico, who recognizes Lucy as the daughter of celestial wizard Layla Heartfilia.

Caprico reveals himself to be a human named Zoldio who fused with Capricorn using his Human Subordination magic. He possesses Loke, but Loke gives his Regulus ring to the newly freed Capricorn, who uses it to free Loke and destroy Zoldio. Meanwhile, Cana suggests to Lucy and Gray that they split up to search for the Seven Kin and defeat them so they can resume the exam. After Lucy determines the location of Mavis's grave, Cana knocks her out with a sleeping spell and abandons her to find the grave, leading her to be found by Kain Hikaru of the Seven Kin.

Lucy and Hikaru’s battle interrupts Natsu’s battle with Ultear, leading Natsu to help Lucy and reform their old team while Ultear leaves with Zeref. Hikaru takes control of Lucy’s body using his voodoo-like cursing magic, which Natsu and Happy take advantage of once they obtain Hikaru’s voodoo doll by lighting it on fire, turning Lucy into a living fireball, and throwing her at Hikaru, defeating him.

Dranbalt tries to help Natsu and his friends evacuate the island as the Magic Council plans to fire Etherion once again, but they refuse to leave. Meanwhile, Juvia is nearly defeated during her and Erza's battle against Meldy of the Seven Kin, but regains her will to fight upon hearing Meldy say she wants to kill Gray out of revenge for hurting Ultear, and sends Erza to search for Gray and their friends. Seeing Juvia's determination to fight for Gray leads Meldy to link both of their physical senses to Gray's to ensure that he dies no matter who is killed in their battle.

Juvia refuses to kill Meldy and tries to stop her from killing herself. In doing so, Juvia witnesses Meldy's happy memories with Ultear through their connected senses and persuades her to stop fighting. Meanwhile, Gray meets Ultear, who claims to be his ally and that her plans for Zeref are part of what her mother Ul wanted. The other members of Fairy Tail encounter Grimoire Heart's remaining forces: Erza faces off against Azuma; a weakened Levy, Lisanna, and Pantherlily against Rustyrose; and Natsu, Lucy, and Wendy against Grimoire Heart's massively powerful deputy commander Bluenote Stinger.

Azuma transforms into a tree as a result of overusing his Great Tree Ark, but makes good on his promise to Erza and returns the guild's magical power, giving Gildarts, Fried and Bickslow enough strength to defeat Bluenote and Rustyrose. Meanwhile, Ultear tells Gray that the only spell that can defeat Hades is Iced Shell. She then takes Zeref and returns to Meldy, revealing to her that she is actually trying to manipulate Gray into defeating Hades for her so she can keep Zeref for herself. However, Gray is unfooled by her deception and, catching onto her true motives, challenges her.

It's Ul's pupil vs. Ul's daughter! What is Ultear really after and why has she turned against her own flesh and blood? The final battle with the leader of the 7 Kin of Purgatory comes to its thrilling conclusion!

Laxus fights Hades with full force and manages to seemingly overpower him. Meanwhile at the camp, the uninjured Fairy Tail members try to protect the injured from the return of some members of Grimoire Heart. Can Laxus manage to take revenge for his grandfather's defeat?

The battle with Hades reaches its thrilling conclusion! Finally, dawn comes to Tenroujima... But is this really the end?

The battle for Tenroujima is over, and Makarov puts the S Class Advancement Exam on hold for now... Meanwhile, Cana decides to tell Gildarts the truth, even though she's not an S Class wizard. But whatever happened to Zeref?