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Beck begins removing wanted posters on the Grid and replacing them with circuitry that says "Tron lives". While waiting for a transport vehicle to go to work, Beck hears a voice over the speaker saying that there has been a security breach and commuters present their discs for scanning. Because his disc says that he is the renegade, another program convinces him to jump the track while the guards are distracted and sneak onto the train. When they part ways, Beck realizes the program has stolen his disc.
Tron gives Beck a fake disc because he will be picked up as a "stray" if he lacks a disc and will begin forgetting everything he ever knew. He then takes Beck to a black market for stolen discs.
At Able's Garage, Mara and Zed are discussing the renegade when Mara notices Bartik and Hopper and is worried. They tell Zed that Paige is putting her plan into motion and Zed is somewhat disinclined to help but soon agrees to build new bikes when they offer a military armband.
They start searching through pawn shops on a bad side of the Grid. A pawn shop owner named Kobol agrees to help saying you can't trust anyone. Tron rightly notices that Kobol was lying and begins warning Beck of the glitches involved in losing one's disc. Some programs surround the two in the street and their gang leader instructs them to attack. Tron and Beck fight back but one of Beck's glitches causes him to forget until a white female program cuts in and leads the two to safety. On the rooftop, she removes her cloak and tells them her name is Lux. She sees that they are strays and jumps over the edge.
Zed demonstrates his new creation, a laser which derezzes a light cycle by going down its light ribbon.
At a club around the corner from the pawn shop, Tron notices a program keeping a close eye on Beck... the one who stole Beck's disc. He charges and is chased down by Beck but before he tells who he sold it to, an unknown program derezzes with a light disc through a wall. Riding away on a red light cycle, Tron, Beck, and Lux follow the rider. Beck glitches again and his cycle is derezzed and he is thrown over the red light ribbon.
Mara is somewhat impressed but she thinks he is making the wrong choice. She leaves him to think about it.
At Lux's apartment, she helps Beck while Tron searches through Galt's memories. Tron is shocked by Lux and the stranger from earlier is revealed to be Kobol. On rthe roof, she tries removing Tron's helmet but finds it is stuck. Beck begins believing the lies that Kobol and Lux feed him (such as that he is a soldier in General Tesler's army) but Tron tries bringing back his memories. Kobol takes Beck to be derezzed while Tron convinces her that Kobol is the bad guy.
Zed is about to demonstrate his laser when a guard brings in Mara who says she is there to help with the demonstration. Zed grins and "accidentally" destroys his control panel while showing Paige. She is very unimpressed and begins blaming Bartik and Hopper for recruiting Zed. Zed and Mara leave, Zed tossing his armband on the ground.
Tron confronts Kobol and is faced with two discs from Kobol. When he gets into a tricky spot, Kobol begins fighting with a light baton which Tron easily knocks away and pins Kobol. He is about to derez Kobol when Beck holds the baton to Tron. He is conflicted in choosing who to listen to, but, when Tron removes his helmet, he backs down. Lux, who is watching, sees that "Tron lives". Kobol is infuriated and begins advancing at Beck with a disc. Tron snatches it before Kobol can deliver a fatal throw and tosses it to Beck, realizing that it is Beck's lost disc. He regains his memory and knocks out Kobol. Beck and Tron contemplate bringing him with them and Kobol comes to and handcuffs himself to Beck as a recognizer is honing in on them. Lux throws a disc to derez Kobol. Tron is too weak to get away by himself and Lux says she will hold off the guards coming to get Tron and Beck and requests that they destroy Kobol's disc... and hers. Tron has to drag Beck away because he doesn't want her to die but begins mourning as they drop her disc into a data pool. Tron tells Beck that he believes he made the right choice in choosing Beck (because the last time he trusted someone he was betrayed by CLU).