Flicker's new invention is the switch armory sword, a small device that can be used as a sword, mace, grappling hook, scissors, or miniature catapult. Princess Flame tells Flicker he should show it to the rest of the knights so they can recognize his skill and increase his chances of becoming a knight. When he finally does show it to them, only Sir Blaze is impressed by it, so the other knights, particularly Sir Loungelot, pick on him, Loungelot saying that he is only a knight because he is Queen Griddle's son.
So Blaze runs off and becomes a hermit. Griddle is devastated by this (to the point of her tears flooding the castle), although King Allfire never liked him much. Griddle tells Loungelot (unaware that he was the one who made him leave) to find Blaze and bring him back. Loungelot gives the task to Flicker, and Flame goes with him.
Blaze goes to the Hermit's Hideaway, where the landlady, Mrs. Shambles, shows Blaze to his room in 1C. 1A is inhabited by a grouchy dragon named Herman, and 1B is inhabited by a Bog Beast. Herman is quickly annoyed by Blaze. Flicker and Flame find him, but he refuses to go back to Camelhot when he hears that the other knights only want him back so Griddle will stop yelling at them.
So, Flicker and Flame decide to stage Flame's kidnapping so that Blaze can come to her rescue and prove to the other knights that Blaze is a worthy member of the Square Table. They rent out Ogre Island, and while Flame stays there, Flicker tells Blaze that an ogre kidnapped Flame. He also tells Loungelot, who is not confident in Blaze's skill and leads Sir Galahot, Sir Hotbreath, and Sir Burnevere to rescue her. Knowing this will mess up his plan, Flicker has Herman point them in the wrong direction, as Herman is willing to do anything to get rid of Blaze.
Count Geoffrey decides that, just for the sake of an evil plan, he wants to really kidnap Flame. As Geoffrey and his Evil Knights attack her, Blaze arrives, but both are captured and tied up. Flicker arrives, disguised as an ogre, but Geoffrey figures out his true identity when Blaze sees through his disguise, and captures him as well. However, Blaze uses the switch armory sword's scissor feature to cut the ropes on his hands, and singlehandedly defeats the Evil Knights and ties them up before hitting Geoffrey in the head with the mini catapult, and Geoffrey and his Evil Knights run off.
Meanwhile, Herman decides he wants to get rid of the Bog Beast as well, so he tells the knights that the Bog Beast kidnapped Flame, so the knights enter to fight the Bog Beast, who gains the advantage. Flicker, Flame, and Blaze arrive, and Blaze gives the Bog Beast some food, thus saving the knights as well and winning their respect. They return to Camelhot, while Herman decides to go to acting school.