The film follows Keldeo, who wishes to become a member of the Swords of Justice, but before it must learn the move Secret Sword so that it will become part of the group.
Later in the night, while the Swords of Justice are sleeping, Keldeo sneaks out to go to Full Court where it fights against Kyurem. Pretending to be the member of the Swords of Justice, the two challenge each other to a battle. During the battle, Kyurem breaks Keldeo's horn, causing Keldeo to become nervous and afraid. Virizion, Terrakion, and Cobalion, who had followed Keldeo, try to stop the fight. In a fury, Kyurem transforms into White Kyurem and freezes the Swords of Justice. Keldeo runs away in panic, while Kyurem starts to chase after Keldeo, announcing that their battle is not yet over.
At the train station, Ash, Iris, Cilan, Pikachu, Axew, Oshawott, Snivy, Scraggy, Emolga, and Pansage are on board the train that will take them into the city. They stop at Windy Station and purchase some Darumaka boxed lunches before they return to the train. An injured Keldeo ends up on the train and Ash and his friends find it. Keldeo tells them that Kyurem is following him and it is trying to escape. However, Keldeo collapses from its injuries. Kyurem arrives with its minions, several Cryogonal, still wanting to continue the fight. Iris remembers about Kyurem, having been told about it from the elder in her hometown. However, Kyurem withdraws when the train enters a tunnel.
The group takes Keldeo to Roshan City's Pokémon Center to heal it, where Nurse Joy explains about the legend of Kyurem and the Swords of Justice, the latter being heroes who protect the Pokémon from danger. Outside the Pokémon Center, Ash and his friends introduce themselves. Keldeosoon spills the beans about its battle with Kyurem. Later that night, Kyurem returns again for the battle, while the group decides to go to Full Court, so they can free the Swords of Justice. Iris uses a zeppelin while Cilan uses an abandoned train (powered by his Stunfisk), tricking Kyurem into thinking that Keldeo is with each of them.
Meanwhile, Ash and Keldeo head towards Full Court in order to free the Swords of Justice. Ash asks Keldeo what are the Swords of Justice like. Keldeospills the beans once more. Upon hearing that Keldeo is heading there, Kyurem heads back to Full Court to continue the battle. Keldeo becomes scared to fight, once more, so Ash and Pikachu head on their own to Full Court to free the Swords of Justice with Pignite and Boldore. Infuriated that they are trespassing its home, Kyurem tries to battle them, but Keldeo rescues them, gaining the courage it needs to fight. Although Keldeo reveals to Kyurem that it is not one of the Swords of Justice, Kyurem reveals that it knew all along, but it still intends to finish the battle. Keldeo transforms into his Resolute Form and the two start to finish their battle. The transformation allows Keldeo to use Secret Sword, making Kyurem fear for power. Their battle causes Full Court to start collapsing and the ice holding the Swords of Justice breaks, freeing them in the process. The Swords of Justice thank Ash and he recalls Pignite and Boldore.
During the battle, Kyurem almost attacks Ash and his friends, but Keldeo gets in the way of the blast to save them. This defeats Keldeo, and Kyurem takes its win after transforming into Black Kyurem. Despite being defeated by Kyurem, the Swords of Justice and Ash and his friends praise Keldeo for finally learning the true power of the sword, which officially makes it the fourth member of the team. The group retreats when Full Court collapses while Kyurem transforms into White Kyurem to freeze everything. Outside, Ash and his friends congratulate Keldeo. Soon, Cobalion thinks that it's time to say the Swords of Justice Oath and it would like Ash and his friends to be their witnesses. Ash and friends agree. Then Keldeo switches from ordinary form to resolute form and they all say the oath together.