The South Seas Alliance, a cult faction of the Federation, plots to declare itself independent. Furthermore, it is discovered that they possess the Reuse P. Device technology of Daryl's Psycho Zaku. The Spartan is assigned to track and destroy the Psycho Zaku before the South Seas Alliance can mass-produce the technology. In Antarctica, Bianca's squadron is ambushed by Zeon mobile suits. Io sorties in the Atlas Gundam and dispatches the enemy units before facing a Grublo mobile armor. The battle sends both units far too deep underwater and Io with his equipment lost slowly sinks to the bottom of the sea, but Bianca in her damaged Guncannon Aqua lifts him back to the surface.
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.
