Five ponies, each waring a conical hat and holding a wand in her mouth, are busying themselves with decorating a wall when a sixth pony, a similarly attired pegasus, flies in complaining about having chipped her hoof polish. An argument over whether the pegasus or the one who gave her the hoof polish recipe is culpable for this soon escalates into a bickering session over what qualities are most important in a queen and which one of the six possesses such. Meanwhile, Spike and the bushwoolies are trudging through the Jewel Desert, and the bushwoolies'... excessively agreeable natures are making it difficult for Spike to find the way back to Dream Valley. They are interrupted by a bright burst of light and follow it to where the princess ponies reside, and are met by one of them who introduces herself as Royal Blue, the land as the Royal Paradise and herself and her fellows as the keepers of the magic wands that control Ponyland's magic.
The princess ponies decide to hold a contest to determine which of them shall be the queen, and Spike and the woolies are asked to judge. They bushwoolies eagerly agree, as they do, while Spike is mostly disappointed that the princess ponies seem so juvenile, bickery, and seemingly the opposite of what a ruler should actually be.
Meanwhile, in a cavern deep beneath the earth, a hulking humanoid of living lava observes the events through a magic mirror alongside his spineless flunky Sludge. This being, named Lavan, announces it's time to seize the princesses' wands, and proceeds to do so by cracking open a ravine to the surface, surfing out on a wave of lava, and quickly taking possession of the objects in question. Once back underground, Lavan berates Sludge for valuing something besides how powerful you are; in his mind, only absolute personal might has any meaning, and he intends to be the mightiest being alive. To further this ambition, he prepares to absorb the wands' power and take possession of all of Ponyland's magic.
Something goes wrong, however, and the ritual goes haywire. This has far-reaching results, as Ponyland's magic quickly starts growing chaotic and unpredictable. Unicorns' magic becomes impossible to control, the sky fills with strange shapes and colors, and the Jewel Desert begins to expand as more and more land is magically turned to crystal around it. Lavan goes back up to capture the princesses, reasoning that he can use them to absorb the wands' magic properly, and walls them in with lava, but Spike takes charge and gets Tiffany to fly off to Paradise Estate to get Megan, with a bushwoolie to guide her. While they successfully escape, Spike, the other bushwoolies and the remaining princesses are caught by Lavan's forces and imprisoned underground.
This episode contains examples of:
- Alien Sky: One of the signs that Ponyland's magic is out of control is that its sky becomes a field of psychedelic swirls of color.
- Power Incontinence: As Dream Valley's magic starts breaking down, the unicorns' own spellcasting starts to become unreliable and chaotic, as Fizzy finds out when her bubbles start coming out unbidden and with enough force to send her rocketing backwards.
- Short Cuts Make Long Delays: Spike and the bushwoolies are introduced after a shortcut proposed by the 'woolies (whose overly agreeable and very excitable natures make them very bad at giving directions) got them lost in the middle of the Jewel Desert.