As their servants wage battle outside the tomb, Bandit King Bakura and Mahad get ready to Duel inside. As they're about to commence, instead of saying "Duel!" they say "Dia Ha!" (in Japanese, it has the same meaning as "Duel" but is more suited for the setting of Ancient Egypt).
Bakura Summons his "Diabound", only this time his appearance is different! Bakura reveals that as the hatred within him grows, his Demoniac Beast continues to evolve.
Bakura's "Diabound" strikes with Wave of Multiple Fangs. Mahad's Magician dodges it and counter-attacks with a direct hit on Diabound. Mahad then transfers part of his magic to his monster to make "Illusion Magician" even stronger. It strikes Diabound again but it still stands.
Meanwhile at the palace, the Pharaoh awakens from his sleep and has a bad feeling about something. From his balcony, he can see Mahad's Wedge Shrine flashing, deducing he is involved in a battle.
However, "Diabound" has the ability to absorb the power of the monsters it destroys. By destroying Mahad's "Shadow Ghoul", it acquired its Dissimulation in Walls ability: it creeps up behind Mahad and attacks "Illusion Magician". Mahad loses some more of his life energy.
The Pharaoh Senses Something
Meanwhile, the Pharaoh has traveled to Mahad's Tablet Shrine and found Mana, who also sensed something was happening to her master. They notice the Sealing Tablet of "Illusion Magician" is slowly beginning to crumble, meaning Mahad's monster is losing its energy.
Meanwhile in the present, Yugi and his friends are still stuck inside the Millennium Puzzle, but they finally stumble on a door who could have some meaning.
As they open it, they see the shape of Bakura Ryou, but it turns out it's actually "evil" Yami Bakura who then turns into a fire-spewing monster and knocks them out of the room. As they return to the room, Bakura and the monster are gone. Shadi warns that it meant to represent the identity of the Pharaoh's true enemy.
Meanwhile, Bakura's "Diabound" is progressively weakening Mahad's "Illusion Magician". However not paying attention, Thief King Bakura steps into a bear trap concealed by Mahad's magic.
Mahad activates another trap, a pendulum axe, to put an end to Bakura once and for all. However he leans out of the way and the pendulum cuts him from from the bear trap. Several other pendulums are activated inside the battle arena.
Bakura jumps on the first pendulum and alters its swinging path, knocking into another pendulum and causing it to swing towards Mahad, almost slicing him away.
Meanwhile, the Pharaoh and Mana have arrived at the Magicians' Training Grounds.
Mana calls upon the help of the other priests at the Pharaoh's suggestion, sending her pet falcon to warn the others with a message (NOTE: in the English dub, the falcon's name is "Anzu", perhaps as an homage to Téa's Japanese name; in the original anime, the falcon has no name).
The Birth of "Dark Magician"!!!
Back inside the Sanctuary, Bakura's "Diabound" activates its Dissimulation in Walls Special Ability again and moves in for the kill. Diabound repeatedly uses Spiral Surge on "Illusion Magician" and saps Mahad of his remaining life energies.
Feeling close to defeat, Mahad transfers his spirit into his monster. As Mahad's is struck down by one of the swinging pendulum axes, the Millennium Ring is finally in Bakura's possession, but Mahad has now created the final form we all know of... "Dark Magician"!
"Dark Magician" uses Magic Shock Wave to destroy "Diabound" and collapse the stone bridge, plunging him into the depths of the chasm.
After winning the Duel, "Dark Magician" (A.K.A. Mahad) is sealed inside the Sealing Tablet. ("Pharaoh! My soul shall be thy eternal servant!")
Meanwhile in the present, Yugi & his friends have maybe finally found a way to transcend to the Pharaoh's plane of existence. They hold hands and concentrate, listening to the Pharaoh's call. It seems to be working and a very bright light opens up around them.
This episode providing the origin for "Dark Magician" mirrors the next episode doing the same for "Blue-Eyes White Dragon".
The place Mahad and Bakura fight at is a magician's training ground in the Dub, rather than the old tomb Bakura had broken into.
The following monsters appeared in this episode. Monsters in italics debuted here.