The story opens at a café in the human world. The numerous café patrons argue among themselves as a strange green mist swirls around their feet. In the corner booth, three girls in hoods sing and absorb the green mist into the red gems on their necklaces. The purple-haired girl Aria Blaze grumbles that she's "tired of fast food" and needs a meal. The orange-haired girl Adagio Dazzle laments that the energy in "this world" isn't the same as that in Equestria.
As the blue-haired girl Sonata Dusk joins the conversation and gets into a light argument with Aria, an individual by the name Misogi Kumagawa appears, and prompts Adagio to notice an explosion of light in the distance. She races out of the café and watches as a dragon flew in the sky, followed by a human figure charging and making a massive light explosion, grinning evilly when she realizes what it is. She explains to Aria and Sonata that Equestrian magic has found its way into the human world, and they will use it to make everyone in the world adore them, while Kumagawa himself relays the completion of his task to the Demon Lord, Laylamon, who is one of the Seven Great Demon Lords released from her imprisonment.
Following the event a few moons later, Aladdin, Alibaba and Morgiana, who had previously returned to their world after being freed from Avia and Rufflet, appear out of the CHS portal from Zagan’s Dungeon. No sooner they arrive when Crash Man appears, trying to eliminate them. With the help of Mega Man and the use of Aladdin's abilities, Crash Man falls. At this time, the trio is approached by the Blue Lantern aliased as Hope the Victor. Though a teen from earth, he tries to act professional. But this proves difficult with the tendencies of the others. But before they knew it they were under attacked by the dark kingdom of Yaksha.
Aladdin meets up with Sunset, who has made an effort to improve after being tricked by Flux into helping with his plans as well as losing the stone to Gengar. She finds it upon herself, with Alladin not knowing who she was before, not being here at all, is able to make friends with him. As the group all reconvenes, they find the rest of the human versions of the ponies can use music to transform, much to surprise, but before learning more, they are attacked by Sharpedo with his new abilities to mega evolve. Alibaba steps in, and despite Sharpedos skill, his brashness makes him lose to what he thought wouldn't hurt him, Alibaba's djinn equipped fire sword.
But while this went on, Sunset went to meet new students, which turned out to be the Dazzlings and a disguised Flux. Kumagawa was also among them as Flux teamed up with the Dazzlings to sign up for the Showcase.
Later in the cafeteria, Sunset joins her friends and mentions that there is something "off" about the new girls. This is proven right when they sing in front of the whole school, turning a simple showcase into an all out battle of the bands tourney. Flux notices this, and hatches his next scheme.
After defeating Sableye, Hope finally gets a chance to meet Jexi and his team, as the heroes officially welcome Aladdin, Morgiana and Alibaba to the group. Having known of the situation already, Jexi sends Luffy, Natsu and Happy, being the two familiar with the school the most. They are just in time to witness Twilight, who has returned from Equestria, and the others fail and trying to recreate the effect that happened last time. So, Luffy deduced they have to do it the musical way, to everyone's surprise, and make Twilight a singer in the band, putting distance in Sunset.
As the Battle of the Bands raged, the Kingdom of Yaksha tries to send others to take the school, thus completing their conquest. But Gyarados is defeated and reformed by the visiting Medaka Kurokami, and Ranma and Sanji team up to take down Tyranitar, who sought to challenge ranma on account of his victory against Gurdurr. Meanwhile, Zorua had snuck off to watch the battle of the bands unfold himself, interested in the idea.. He is stopped by Jexi and Hope, and realizes his childish ways get in the way of ruling properly. However, Houndoom sees Zoura admit this, and takes over, preparing for an all out invasion.
But while this happened, Flux had his own plans. Using the Dazzlings own singing, he created a sound weapon, designed to make distant worlds fall under his control as part of his greater plan. During the final performance, he relays this plan into action, but the heroes arrive to stop him, backed by the music from both Rainbooms and Dazzlings as this battle, Jexi, Maka and Soul as well as hope finish Laylamon for good, and Absol returns from hiding in Kadic to dethrone Houndoom with his Mega power and his own strength and defeats him.
In the aftermath of these battles, Sunset is poised to join, but is regarded as a friend. Gyarados is welcomely accepted before they leave, but not before he shares the news that the Fairy Kingdom, Oberon, is truly real.