The kingdom of Knighton is buzzing with festivities as there is a class of knights graduating from the Knights' Academy. There are only five graduates since there hasn't been much need for knights as there haven't been any monsters in the kingdom for over 100 years. These graduates are the knight's knight Clay Moorington, rich and obnoxious Lance Richmond, daredevil Aaron Fox, the ever-hungry Axl, and boisterous Macy Halbert, Knighton's princess. Setting things up for the graduation are stoic Ava Prentis and peppy Robin Underwood. Macy's father King Halbert initially doesn't want to let Macy graduate over fear for her safety but his wife Queen Halbert reminds him that he promised.
After the knights' performances monsters seemingly attack the graduation. The knights fail to fight them off but it is revealed that it is just Merlok, the kingdom's beloved royal wizard, playing a prank. He then puts on a magic show which wows everyone. Jestro the royal jester, Clay's best friend, is not so performance-inclined, and after repeatedly messing up his act he accidently causes a citywide power outage while juggling power maces and runs off crying.
Walking through the castle moping, he hears a voice coming from Merlok's library which has been unlocked due to the power outage. Inside he discovers the Book of Monsters, an evil book containing a multitude of monsters. The Book convinces Jestro to become evil, telling him that instead of being bad at everything he could be good at being bad. Clay walks into the library, looking to comfort his friend, when he sees the Book telling Jestro to steal a staff and summon some monsters. He does so and makes them attack Clay. Clay tries to fight but is outmatched and when all hope seems lost Merlok enters the library. He uses his magic to throw Clay outside to the library balcony and then sacrifices himself with a magic spell to stop Jestro and the Book of Monsters. Just as Clay tries to help the library explodes, knocking him out.
Clay awakens surrounded by the rest of the knights. He opens the doors to the library and discovers that Merlok is gone, the only thing left of him being his hat.
Far away from the castle, Jestro and the Book of Monsters awaken as well, and the latter is delighted that with Merlok gone, they are free to start their reign of terror.
This episode includes examples of the following tropes:
- Fantasy-Forbidding Father: Macy's dad refuses to let her be a knight because he thinks it's too dangerous.
- Heroic Sacrifice: Merlok sacrifices himself to save Clay and stop the Book of Monsters from regaining the evil books. It only manages to slow him down, but buys the kingdom enough time, as we see later.
- I Meant to Do That: After Lance messes up part of his routine for the knight graduation ceremony but still defeats his opponent, he claims everything went as planned.
