Dharma returns to Shimoni Dhato with Obi the mechant and some fighters, chief among them LAYI, a militia warrior whose mistakes cost the city of Taku ground and soldiers (in reality her unit was betrayed by a comrade working with the Fire Nation). Jayi believes she can return to Taku to forge stronger alliances (because of her affluent parents and her military background) and also clear some supply routes so Shizaku can continue work on his landspeeder project, stalled for resources.She recruits Jang Tae and the two head back east.
Meanwhile, Dharma and Shizaku follow Moshi and Yina into the mountain cave where the suspected distressed spirit dwells. They lose sight of Moshi but come to a vein or ore Shizaku could use to begin processing. Shizaku is tempted, but the dragon bones nearby give Dharma reason to pause, and the two argue about the best way forward. Dharma tries to insist Shizaku not rush in, but the engineer slowly convinces the Airbender that they can better move forward to defend themselves if they can begin excavation immediately.
In a strange world, Moshi and Yina encounter spirits (or echoes of spirits) amidst a starry ruined cityscape. Per Yina's guidance, they avoid aggression and manage to find and treat with the spirit of Horu. When Moshi explains their purpose, Horu mentions that he was attacked by General Yama and the two of them were trapped in part in this third realm in between the material and Spirit Worlds.
As a waterbender, Yina has been trained to pacify dark spirits, and says she can begin but they might get attacked by the other spirits, drawn to the ritual. Moshi asks Horu if they can find and bring their allies into this realm, and Horu reaches out to bring Shizaku and Dharma from the material cave into Moshi's sphere.
Dharma and Shizaku fend off spirits, trapped in some of their negative energy, but manage to help Moshi defend Yina during the spirit-bending ritual. With Horu pacified, the group is returned to the material plane, and Shizaku begins looking at his ore-veins, still against the better wishes of his comrades.
Out east, in Taku, Layi and Jang Tae manage to well avoid the Fire Nation patrols around the city, using a more-hidden passage that Layi recognizes. Major Harano explains the agreement with Dharma, so Layi decides to drum up support in the upper echelons of the city. Layi visits her parents, who are as surprised at her continued existence as they are disappointed in her continued failures. Layi's parents are of little help though, comparing her to her brother, Yoyi, but Jang Tae gets them to agree that they can be better off moving people to safety from the city. Layi returns to Harano and calls him out for not truly leading the people out to safety, but turtle-ducking in the besieged city. She gets him to agree to start moving people and supplies if she and Jang Tae can clear out a path. The two go out and engage the Fire Nation soldiers, even capturing a squad to bring back to Harano. They begin to fortify an escape path.
- The spirit of Horu, trapped in between the material and Spirit Worlds, is freed by Yina.
- Horu and General Yama fought and were both affected by this phased existence.
- An escape path is forged in Taku by Layi and Jang Tae (still in Taku).