With both sides suffering massive casualties, the Full Armor Gundam engages in a final showdown with the Psycho Zaku. Meanwhile, the surviving members of the Moore Brotherhood board the Dried Fish to take it over, but the remaining members of the Living Dead Division refuse to be taken prisoner and plan to self-destruct the vessel along with everyone on board. The Federation survivors manage to neutralize the Zeon crew and seize the Dried Fish, while Io and Daryl's battle results in heavy damage to both of their mobile suits. A Zeon reinforcement fleet then arrives and captures Io and the Federation survivors while rescuing any remaining Living Dead members.
Federation troops and Zeon forces carry out a fierce battle in the Thunderbolt Sector in what was once Side 4 "Mua". The Thunderbolt Sector is a shoal zone composed of the debris of destroyed space colonies, named for the electrical discharges from the metal debris. MS pilot Io Flemming is among the Federation soldiers who are dispatched to the area, where Zeon sniper Daryl Lorenz awaits them on the battlefield.
