It seems a very gifted and mysterious Bakugan player named Masquerade has been stealing Bakugans from kids all around the world.

Masquerade approaches a young Bakugan player named Rikimaru while he's walking in the woods. Playing to Rikimaru's competitive nature Masquerade offers the boy a very special Bakugan ball. Across town Dan begins training for his rematch with Masquerade while Drago watches from the sidelines. Drago is still unsure of Dan's motives but decides to team up with him in the hope that he can help save his home world Vestroia. Rikimaru surprises Dan on a bridge and challenges him to a battle that sees three of Drago's kind sent into the Doom Dimension. As the battle continues Drago decides to ignore Dan's orders and uses a dangerous technique to save himself and win the battle. Drago berates Dan for his careless Bakugan playing and this causes a rift between the two allies. Insulted and angry, Dan curses the day he ever met Drago and throws him into the ocean.

Dan and Runo meet for the first time other than on the Bakugan web-site and are surprised that they actually live in the same town! Dan accidentally drops his wrist computer, and after he is gone, Runo notices it and picks it up. She sees that Dan has been challenged to a battle by Masquerade down by the river. She decides to go in his place, but ends up dueling against a boy named Tatsuya.

While at an amusement park, Dan and Runo are invited on stage to assist two brothers performing a magic act. Dan is offered to pick a card and things go from bad to worse when his choice is revealed to be a Doom Card! It just so happens that the brothers are working with the mysterious Masquerade and they trick Dan and Runo into a battle.