Inside the Marmotah, Squad 7 engages the Imperials to allow Faldio and Welkin to search for Alicia. Faldio is shot protecting Welkin and sacrifices himself with a grenade to hold off the Imperials. Alicia is brought in front of Maximilian and he tries to convince her to join him but Alicia calls him a pathetic fool. When Welkin finds Alicia tied up on the deck of the Marmota, Maximilian attacks him using the Artificial Valkyrian System drawing power from the Holy Lance. He frees Alicia and challenges her and Welkin to a duel to demonstrate the power of his superior technology. Alicia regains her strength and unleashes her Valkyrian flame which overloads the system and injures Maximilian. Refusing to surrender, Maximilian hurls himself to his death and the Marmotah beings to collapse. Alicia pleads Welkin to leave her because she feels she can no longer can control the burning Valkyrian flame. However, Welkin embraces and kisses her, extinguishing the flame. After the battle, the Empire and Gallia sign a peace treaty, ending the seven month Gallian War. Princess Cordelia is cheered by the citizens of Gallian in her coronation as Archduchess despite her Darcsen heritage being revealed. With the Miltia disbanded, all of the members of Squad 7 go their separate ways. Welkin and Alicia return to Bruhl, promising to live and honor the memories of those that died in the war.
When Imperial forces attack the small border town of Bruhl, Welkin Gunther, son of late General Belgen Gunther, is forced to fight for his life alongside Town Watch captain Alicia Melchiott. Along with Welkin's adopted sister Isara, the three escape to Gallia's capitol and subsequently join the country's militia forces. As members of the newly-formed Squad 7, they must work to repel the invading Imperial forces and discover the true purpose of the invasion itself.
