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The reveal in "Surprise," where Hercules demonstrates he anticipated Callisto's treachery and will be able to escape the labyrinth without her aid.
"That leads right back to the entrance. Surprise!"
Hercules shaking off his Heroic BSOD in "Resurrection" - allowing him to face Morrigan in a rematch and win.
Iolaus 2 taking a level in badass in "Love on the Rocks," in which he overcomes several mooks alone to rescue his girlfriend Nautica.
In the same scene, Aphrodite gets into a fistfight with Discord and kicks her ass.
Salmoneus in "Eye of the Beholder," his very first episode. Hercules and the Cyclops are battling Hera's forces to defend a village. The villagers, however, refuse to help Hercules because they deem the Cyclops a freak. The salesman doesn't stand for that.
Salmoneus: It would be better to die with him than to stay here with eunuchs like you.
Xena surviving the gauntlet.
In "Judgment Day," a Brought Down to Normal Hercules attacks Strife for murdering Serena and still kicks his ass. Strife only turns the tables when Ares reminds him that he's a god and to use his powers, but it doesn't take long for Zeus to make things fair. Cue an epic thrashing.