Pursued by a vigorous Dragon, Lee is ultimately bested in battle and plummets from the roof of Lee Industries. Critically damaged in the fall, Lee's Hard light Armour begins to malfunction and absorb his physical form, affecting him mentally and restoring him to a more rational state.

Confronted by The Alpha Teens, and regretting his previous actions, Lee reveals everything that he knows to Axel regarding his past, including his ties to Sebastian Manning, and a clandestine organization known as "The Serpent's Tale", whom Dragon serves. The truth behind Sebastian's fate revealed, Axel sets out to confront the organization and it's leader, Guan.