As Von Lohengramm celebrates his coronation and Yang commits himself to marriage, Julian unites with Admiral Von Merkatz to form a new resistance force.
After admiral Von Merkatz succeeds in hijacking many former Alliance ships and their crews, Oberstein orders Yang to be taken prisoner, laying a political trap to increase imperial authority on Heinessen.
After the bombing of the Terraist headquarters, Julian decides to travel to Heinessen. Meanwhile, Oberstein is held back by the other commanders, allowing Yang to leave Heinessen and seek out Merkatz' rebellion.
A fire destroying most of Heinessenpolis may prove useful for the imperial forces. Meanwhile, Yang is preparing to defend Iserlohn Fortress against another invasion.
Under pressure of the imperial fleet, the El Facil Revolutionary Government agrees to retreat from Iserlohn Fortress. Meanwhile, the remnants of the Terraist church may prove more of a threat than thought.
Governmental reforms take place in the former Alliance territory and the newly founded Iserlohn Republic, where Julian ponders on his duty to succeed Yang.