Intro: Drako voice over as we flashback to his defeat against Splinter in the BattleNexus Arena long ago. Then we jump to the Ultimate Ninja poisoning Leonardo followed by a scene where we see Splinter sitting in a dungeon prison cell. Then flashing to the Daimyo’s war staff and the Dark Ninja Assassins about to kill the Daimyo, we learn that Drako will betray the Ultimate Ninja once everyone else is out of the way.
Act 1. Open with Usagi and Donatello fighting off the Dark Ninja Assassins. As they battle, we see a few of the Assassins heading straight for the unconscious and wounded Daimyo.
Cut to the arena where the Ultimate Ninja announces that his father will soon perish. The crowd gasps and the Ultimate Ninja states that the BattleNexus must continue in respect to his father's wishes. The Ninja then instructs Gyoji to continue the matches while he attends to matters of state. Mike and the other three warriors are ushered through a portal to the semi-final round and the fights begin.
Inside the palace, Drako demands that the Ultimate Ninja give him the Daimyo's war staff as was promised. The Ultimate Ninja informs his nefarious partner that the staff is in safe keeping until the Ninja is announced as the new Daimyo and Drako must be patient until that takes place. As the Ultimate Ninja departs, Drako snarls that his patience has reached an end.
Outside, Raphael and Traximus are interrogating a palace official, intimidating the fellow until he reveals where Master Splinter is being held.
Inside the palace, Don and Usagi continue to battle the Dark Ninja Assassins. Usagi is caught off guard and ends up chained to a pillar, where he is trapped. An Assassin raises his spear and charges the helpless Ronin rabbit.
Act 2. As the spear comes down on Usagi, Leonardo’s katana blades suddenly block it. We see that a weak but ready Leo has come to Usagi's aid, and the three warriors fight off the Assassins who flee without killing the Daimyo.
Outside, Raphael and Traximus survey the palace for a way inside. The see the official reporting to the guards at the front gate, and decide that they'll have to scale the palace walls in attempt to sneak in and rescue Splinter.
Meanwhile at the BattleNexus arena, Kluh beats Gen (who was unable to bribe the brute into forfeiting the match and splitting Gen's bet money) and Mike beats La. Mikey gloats about his latest victory only to look over and see that Kluh has won. Suddenly Mike becomes much less cocky.
Act 3. Open with Michelangelo and Kluh being transported by Gyoji to the final BattleNexus arena.
Raphael and Traximus break through an upper floor window to gain entrance to the palace. Raph spots a huge curtain and tells his Triceraton friend to bring it along.
Cut to the Daimyo’s throne room where the war staff was being guarded by dozens of armed soldiers - troops that have been attacked and defeated by Drako. As the evil dragon prepares to steal the Daimyo's war staff, the Ultimate Ninja appears from behind a tapestry and grabs the weapon. The ninja states that he knew that Drako would betray him, so he waited here so he could see the drake's face when his planned was foiled. The Ultimate Ninja then attempts to power up the war staff to fire energy beams at Drako, but the staff is too powerful and the treacherous noble is unable to control it and it fires out of control. As the staff fires energy randomly, Drako attacks his former partner, knocking him down easily. Drako then picks up the war staff and demonstrates that he has no trouble wielding its powers as he fires a blast of energy into the Ultimate Ninja's chest, sending him reeling.
Raph has climbed on top of Traximus' shoulders and they've wrapped the curtain around themselves to form a cloak, making the unlikely duo appear to be one very large (yet small-headed) creature. The heroes approach a pair of armed men who are guarding Master Splinter's cell. Raphael tries to bluff the guards, but they won't budge - however, the soldiers didn't anticipate the two giant fists that burst out of the curtain-cloak and the men are knocked unconscious. Traximus bends open the bars on Splinter's prison cell and the three head upstairs to seek the Daimyo.
Back at the BattleNexus arena, Mike and Kluh are circling each other. Up in the Daimyo’s box, we see the Ultimate Ninja crash through the doorway as Drako appears, punishing the Ninja with energy beams from the war staff. With a final blast, the Ultimate Ninja is thrown from the box and lands on Kluh, knocking out the purple giant. Drako then jumps down into the arena in pursuit of his quarry. Gyoji tries to intervene, but the dragon silences him with a savage blast from the war staff.
Cut to the Healer’s Pavilion, where the Daimyo is awakened by Splinter and the others. The BattleNexus overseer learns about his son’s betrayal and Drako’s rise to power. The Daimyo struggles to his feet with assistance from his friends and he teleports the group to the arena to stop Drako.
The group arrives in the arena and the Daimyo orders Drako to hand over the war staff - something the drake has no intention to do - so the Ultimate Daimyo uses his powers to try to reclaim the powerful weapon. In the struggle, Drako tries to fire on the group, but he loses control of the war staff. The staff gains power through the heart of its wielder, and since Drako is evil, the weapon supercharges on his negative energy and creates a giant, interdimensional rift which begins to suck everything into it. Our heroes struggle to gain handholds to prevent themselves from being caught in the rift. Gyoji is sucked into the rift and disappears!
Act 4. As everyone is being sucked into the air, they try to grab onto the ground. Mike uses his nunchaku to break into the stone floor and Kluh grabs onto his legs.
Traximus uses his axe to stab the ground and hold on. The Triceraton warrior grabs Donatello with his free hand and others then get what holds they can. This creates a chain of Traximus, Don, Usagi, Leo, the Ultimate Ninja and Drako all holding onto each other in that order. Drako and the Ultimate Ninja begin to fight, causing Leonardo to lose his grip on the Ultimate Ninja, sending both he and Drako to disappear into the rift - still fighting each other the entire way.
Raph manages to leap over to the Daimyo's war staff and pins it to the ground with his sai. With his free hand, Raphael grabs the weapon and tosses it to Master Splinter, who hands it to the the Daimyo. The Ultimate Daimyo uses the war staff to close the rift and everyone lands safely on the ground. Mikey struggles to free his nunchaku as Kluh staggers to his feet behind the Turtle. Mike finally manages to get his weapon out of the stone - sending one end flying over his shoulder where it strikes Kluh in the forehead, knocking the behemoth unconscious. The Ultimate Daimyo announces that Michelangelo has won this year's BattleNexus tournament!
Cut to the Daimyo’s Box some time later where the Ultimate Daimyo pronounces Mike the new BattleNexus Champion, giving him a crown and a large trophy. The Daimyo laments the loss of his son, and Splinter notes that he may return someday. Leonardo and Usagi exchange pleasant goodbyes and the Daimyo transports the Turtles and Splinter home. Mikey begins to brag about his victory, which annoys Raphael. Mike teases Raph, who then attacks his brother, sending all four Turtles sprawling to the floor, where they begin to fight. Splinter sighs, smiles, and notes that it's good to be home.
The camera pans out of the sewer all the way to outer space, where a Triceraton mothership is traveling. Inside the monstrous vessel, Commander Mozar enters the High Council Chambers and informs Prime Leader Zanramon that the Fugitoid has been traced to on the third planet from the sun. With that they begin to prepare for a full-scale invasion of Earth!