The episode begins with Spike and Sweet Stuff worrying over the state of Mimic, a unicorn who's suffering from an unclear disease that's causing her to start Fading Away. Unsure on what to do about this, the ponies default to sending for Megan; however, even Megan cannot recognize the illness affecting Mimic. Reasoning that it's probably caused by magic, Megan, Spike and the pegasi visit the Moochick for advice. Once the group reaches the Mushromp, they're spooked by the howling of wolves and run into the Moochick's home, startling him out of an experiment he was working on. As it turns out, the howling came from a music box he was using to scare away intruders to make sure he wasn't bothered. The Moochick does indeed know the cause of Mimic's illness, and recounts a legend explaining it:
Mimic descends from an ancient unicorn from the land of Argyle, who was given four magical golden horseshoes forged from starlight — one showed visions, one shone light, one granted telepathy and the last allowed her to fly through the air. However, she was caught in a whirlwind and left in Dream Valley, and her horseshoes were left scattered in distant lands. Over the years, the shoes were brought farther and farther from each other, weakening their magic and weakening Mimic herself as a result. The horseshoes must be gathered to save her, but the Moochick only knows of the location of one — the horseshoe of visions, which lies in the land of Skreerah. He gives Megan his howling box, suggesting that it may help them in their quest, and offers to look after Mimic while the others are away.
After singing a jaunty song and flying past some threatening-looking clouds, the group reaches Skreerah. There, they encounter the Skree, a people who resemble talking ostriches and use the horseshoe, which they call the Crescent of Visions, to divine the future; as they inform the ponies, the Skree only bet on sure things, and like to know the outcome of wagers ahead of time. Wind Whistler offers to race Fleetfoot, the leader of the Skree, for the horseshoe; Fleetfoot accepts, on the condition that Wind Whistler become his servant if she loses. She does lose, and it's revealed that Fleetfoot looked into the Crescent to see the outcome and accepted because he knew that he would win. Angry, Megan uses the howling box to scare the Skree; in the confusion, she steals the shoe and the group escapes by wing.
The horseshoe shows them the location of the next one, which lies in Blurgland. This is revealed to be a series of tunnels home to the Blurgs, a rodent-like people who hoard junk and riddles. Since they have no junk to trade for the horseshoe, the chief Blurg asks for a riddle he doesn't yet know as his price for the shoe. He easily answers Megan's first try, but Paradise stumps him with the Riddle of the Sphinx and secures the horseshoe for the group. When they actually go to retrieve it, the storage room where it's kept is a terrible mess. Paradise suggests using the light it emits to find it, which allows them to discover it where it's been shining right beneath their feet. On extracting it, however, the whole garbage pile tips over, and the ponies narrowly lift Megan, Spike and their Blurg guide to safety.
Grateful for their rescue of his kinsgopher, the Blurg leader tells them that the next horseshoe is in the tunnels of the goblins, who stole it long ago, and has a tunnel dug to there. Once in the goblin tunnels, the horseshoe begins to shine more and more brightly as the group approaches the next one. However, before they can find it, they're captured by a group of goblins.
This episode contains examples of:
- Chekhov's Gun: Early in, the Moochick gives Megan his howling music box, telling her that it might be useful in her search. Later, it proves extremely useful in frightening the Skree, allowing Megan to throw off their attention for long enough to steal the horseshoe they guard.
- Cliffhanger: Right as the episode ends, a trio of burly goblins finds the heroes and closes in on them.
- Fading Away: The main symptom of Mimic's magical illness is her growing increasingly translucent and insubstantial.
- Objectshifting: When scared, the Skree can turn themselves into rounded boulders.
- Ostrich Head Hiding: When the ostrich-like Skree at scared by something, they respond by hiding their heads in the soil. This is more effective than most examples, however, as doing so also turns the Skree into visually unremarkable rocks.
- Remember the New Guy?: Mimic debuts in this episode, but is introduced as a familiar character whom the others are already well-acquainted with.
- Riddle of the Sphinx: Paradise uses this riddle to pay for the horseshoe held by the Blurgs, as their leader is only willing to part with it for a riddle he doesn't know. He's quite stumped by it, guessing a series of increasingly improbable creatures before conceding defeat.
- Wager Slave: Fleetfoot accepts Wind Whistler's challenge to a footrace for the Crescent of Visions on one condition — that is she loses, she'll become his servant forever.
- What Kind of Lame Power Is Heart, Anyway?: One of the Golden Horseshoes lets you see into the future, one lets you read minds, one summons a cloud you can fly on and the fourth... makes you glow really brightly.