Zack attempts to fight Rita & Nyanma's spell, but his fear and self-doubt are too great. In his verse style, Quagmire tells the Rangers that only he can help them escape. Meanwhile, back on the moon, Rita, Nyanma and her minions are reveling in their apparent first victory And The Capture of The Time Shifters.
Back on the island, the Rangers realize what they had learned, and after a few tries of remembering his name, Trini shouts Quagmire's name, and the little man appears. Kimberly tells Quagmire that Rita & Nyanma are making her friend Zack fade away, and then Quagmire realizes that Rita & Nyanma have sent the teens here to destroy them with their own worst fears and self-doubts. Quagmire urges Zack to think about something positive, and Zack recalls the time he'd faced off against Rita's Knasty Knight and Shadow-Con. By remembering he had the power to defeat the monster, Zack's body fully restores itself.
When Rita & Nyanma discovers that Zack has somehow escaped her spell, she still looks on the positive side, because without their powers, it's only a matter of time before the rest of the Rangers are destroyed. Meanwhile, at the Command Center, Alpha 5 Zordon and Aura are trying to contact the Power Rangers, but are unable to, so Alpha attempts to boost the power of the communication signal, but ends up destroying the console in the end.
Back on the island, Tommy suggests that Quagmire may know what happened to the Rangers' powers, but in a verse, he tells them that they must find their powers on their own. Billy suggests to start going in an opposite direction from their position, but just as they are getting started, Goldar confuses Kimberly with an illusion of Bulk and Skull dressed as angels and helping a lost Turtle find its way home. But just like before, when Zack faced the python illusion, the other Rangers cannot see what Kimberly is seeing. This illusion implants seeds of self-doubt in Kimberly's mind and heart, and she begins to fade away. Trini calls for Quagmire's help, and in his verse style, he urges Kimberly to recall her memory of how she destroyed the Terror Toad monster (which since then, Dave was forced to have to take a shower to rid of the experience of getting eaten). With that positive thought, Kimberly's body is able to fully restore itself.
But it's not over yet, as Tommy now feels the effects of the island's magic, and he begins to attack Putty Patrollers who he thinks are ganging up on him. However, under the island's spell, Tommy has mistaken the other Rangers for Putties. The Rangers—and Rita—realize that Tommy has lost confidence in his friends. The other Rangers try to snap their friend out of the spell, but fighting the "Putties" soon exhausts Tommy and implants seeds of self-doubt in his mind and heart. He starts to believe he is unable to win, and begins fading away. Zack urges for Quagmire's help, and Quagmire urges Tommy in verse to believe in his skills. Tommy recalls the day of the Angel Grove Youth Center costume party, when he'd had to fight off a horde of Putties on his own. He had managed to defeat them—and restore himself to normal.
Later on, Trini begins to feel paralyzing fear that Rita may try something with her next, and at that point, she herself starts to fade away while experiencing a traumatizing event—when Billy was trapped on a high mountain ledge by Putties, and only she could rescue him, but first she had to overcome her fear of heights. Quagmire realized what was happening, and in verse told Trini to overcome the traumatic event. On this, Trini could see in her mind's eye herself reaching Billy in time and sending the Putty hurtling over the ledge. On this note, she regains her full corporeal form. But then, Billy starts feeling doubtful about his own skills, and Quagmire presents a memory for this young Ranger, when he had to save the other Rangers from Madame Woe's dimension. By remembering the positive outcome, his body was fully restored.
Then Jason suggests that they find a way off the Island of Illusion, but is taunted by Goldar, who says that Jason should have been the one to lead the Rangers to victory. In his illusion, Jason sees his friends fade away completely, and he believes it is his fault that he is now alone. But Quagmire's voice echoes in his head, telling Jason he can win. Jason remembers his first solo battle with King Sphinx & Eldora-Con, and recalls the positive outcome, because of the fact that he refused to give up, even though he was all alone in battle.
After the final illusion is broken, the Rangers' communicators and Power Coins are restored to them, and they realized that they could have escaped all along if they had each believed in themselves in the first place. On this note, Rita transforms into a giant and shakes the Island of Illusion, causing earthquakes all over. The Rangers morph and teleport off the island just as Rita uses her wand's energy to destroy it.
When they return to Earth, the toxic foam melts off the Megazord and the Dragonzord, and all six Power Rangers reappear in the Megazord cockpit. Combining their Zords into the Mega-Dragonzord, they are able to destroy Mutitus & With The Help Of Muscles-Master & Mosbee-Master, but they still have Lokar to deal with. They call forth Titanus and form the Ultrazord. Ultrazord launches its finishing blow on Lokar, but he retreats back into space, as does Rita & Nyanma And Bring Back Moah To Normal Thanks To Bakumaru's Revealing Mirror.
The Rangers return to the Youth Center, in time to see Bulk and Skull blow it on the dance floor and getting a negative score in return. Then Zack is called forth to compete, and after some gentle urging and the audience chanting his name, he goes out and dances as he has never danced before. Kimberly wonders who is providing the music, and then realizes that the disc jockey looks like Quagmire (although she calls him Quasimodo). At the end, the judges give Zack a perfect score, and Ernie declares him the winner.