At the Castle, Prince James is taking his Junior Knight test in the courtyard under Sir Finnegan's supervision. At first, James does an outstanding job, but when he gets to the wall, he meets his downfall: Instead of climbing over the wall with a ladder, he pole vaults over it with a staff. This proves to be a mistake, for once he is over the wall he lands in a mud puddle. This slows him down and he fails to cross the finish line in time. When Sir Finnegan informs him that he failed the test, James protests because he was not expecting to get caught in the mud, only for Sir Finnegan to tell him that he should have looked before he leaped. Both Roland and Finnegan tell him that he still did well for his first time and can always try again. All he needs is more practice, not just on the course but in the real world as well by going on an adventure. Sofia feels sorry for James, but then suddenly her Amulet starts to glow blue. It is time to go to the Secret Library.
After Sofia arrives, the Library selects a book called The Tale of the Eternal Torch. The book goes inside the pendulum and the narrator proceeds to tell her latest story about the dragons who live on the Blazing Palisades and how their island home is under threat by sea monsters. As the story goes, the Sea Monsters want to claim the Palisades for themselves, and intend to replace the Eternal Torch with the Forever Fountain, whose magical waters could drown out the island's fires and chase the dragons away. To give this story a happy ending, Sofia must journey back to the Blazing Palisades and stop the sea serpents from taking over the island. As Sofia hitches one of the flying horses up to a coach, James overhears her talking to the horse about her plans. While she is getting the horse a snack, James climbs inside the trunk on the carriage. Unaware of this, Sofia gives the horse his snack and takes off for the Blazing Palisades.
Sofia arrives at the Blazing Palisades and, upon landing, discovers James in the trunk. Taking up Sir Finnegan's advice, James chose to accompany her so he could practice his knight skills. Sofia is far from pleased that her big brother stowed away, but James assures his little sister that he will be a big help. Reluctantly, she agrees to let him help, much to his delight. Just then, they spot some lizards in the distance, which Sofia identifies as the sea monsters who have come to claim the island for themselves. They come onto dry land and begin looking for the trail that leads to the Eternal Torch, which is at the very top of the island. Sofia decides they should go and warn Everburn by sneaking up the trail to his cave, which is also where the Eternal Torch is. However, James runs onto the trail, and unwittingly shows the sea serpents which way to go. He tries to stop them by ordering them, forcing Sofia to save him from getting stomped over. Flambeau and his group come out and greet them. Sofia tells them about the sea monsters. Flambeau identifies their leader, Aqualina, as an old enemy of Everburn. He tells Sofia and James they must take the tunnel that leads to the bridge, where they can intercept the Sea Monsters. Once there, they can stop them by burning down the bridge. James agrees to the bridge burning idea, but refuses to take the tunnel. Instead, he wants to fly there on Smokelee who, much like James, tends to get so caught up in the heat of the moment that he forgets to think things through. James and Smokely take off to stop the sea monsters at the bridge. Nitelite tells Sofia that flying over sea serpents is a bad idea, which is proven true when the sea serpents spot James and Smokely, and shoot them out of the sky with water. By the time Sofia and the others catch up, the pair's recklessness has cost them their chance to stop them at the bridge. James protests, saying he did not know about their ability to shoot water, to which Flambeau sternly states was because they rushed off before getting the facts. Nitelite says they still have time to warn Everburn if they use the tunnels this time. After they do so, Sofia wakes Everburn and tells him what is happening. Everburn and the other dragons prepare for battle. James wants to help, but Everburn tells him to stand aside, and the dragons engage in a singing battle with the sea serpents.
When this only causes a stalemate, the dragons decide to block them off by building a wall on the trail. James is fuming about being left out of the action. When he sees a big rock, he decides to add it to the wall and, despite Sofia's protests, sends it rolling. This proves to be a mistake: Instead of strengthening the wall, the rolling rock destroys it. With nothing in their way, Aqualina and the Sea Monsters replace the Eternal Torch with the Forever Fountain, which unleashes an array of torrents that flood the Palisades and washes the dragons out. Aqualina changes the island's name to the Watery Palisades. James wants to fix everything, but Sofia tells him they need a plan first, and reminds him of what Sir Finnegan said. James agrees and, together with the dragons, they come up with a plan to restore the Watery Palisades to being the Blazing Palisades. The dragons distract the sea serpents by breathing fire. This time James listens to Sofia when she tells him to wait. This enables James and Sofia to enter the cave without any problems. They put the Eternal Torch back on its pedestal in a way that merges the Torch's magic with the Fountain's magic. This merge creates a new island that is half-Blazing at the top and half-Watery at the bottom. This convinces Sofia and James to leave things as they are and convince the dragons and sea monsters to make peace. The dragons and sea serpents agree and the Palisades becomes the Misty Palisades.
Upon returning home, Sofia goes back to the Secret Library to review the finished story, and then goes to watch James retake his Junior Knight test. This time, the finish line is behind a door. James checks the door instead of busting it down. This proves to be a wise move, for just like before, there is a mud puddle on the other side. Using a plank, James safely crosses the puddle in time to cross the finish line and passes the test. Sir Finnegan congratulates him and promotes him to Junior Knight.
- Ariel Winter as Sofia
- Nicolas Cantu as Prince James
- Sara Ramirez as Queen Miranda
- Travis Willingham as King Roland II
- Hugh Bonneville as the Narrator
- Oliver Platt as Everburn
- Mick Wingert as Nightlite
- John Michael Higgins as Flambeau
- Carmen Carter as Aqualina
- Pat Musick as Dolphina
- Candi Milo as Dorsal
- Cathy Cavadini as Coral
- Robin Atkin Downes as Sir Finnegan
- This is the fifth installment of the Secret Library story arc, preceded by "The Secret Library", "Olaf and the Tale of Miss Nettle", "The Tale of the Noble Knight" and Elena and the Secret of Avalor.
- The Dragons of Enchancia make their second appearance in this episode, following their debut in The Curse of Princess Ivy -- except Flambeau, who makes his third appearance in this episode.
- James is the second member of the Royal Family of Enchancia to go with Sofia on her mission, the first one being her Aunt Tilly in "The Secret Library".
- James almost found out that Sofia is the Storykeeper of the Secret Library, but he didn't bother trying to figure it out.
- During the opening, the episode's title is split into two parts when the title card is presented.
- This episode is a foreshadowing of “The Mystic Isles”.
- Moral: Always think before you act.
- This is Sir Finnegan's second appearance since "The Silent Knight".
- James is promoted from Squire to Junior Knight.
- The Blazing Palisades becomes the Misty Palisades.