Katara and Sokka return to their home village in the Southern Water Tribe, discovering that it has been transformed into a bustling and thriving city reminiscent of the Northern Water Tribe, and that their father Hakoda has been elected leader of the entire south. Though Sokka is enthusiastic at the changes, Katara fears that their tribe is losing its cultural identity. While dining out with Malina and her brother Maliq, the northerners in charge of the redevelopment process, thieves steal a briefcase containing important documents from Maliq, with Malina getting injured in the struggle.
Katara and Sokka follow the thieves to a secret hideout occupied by a group of southern nationalists, who resent the northern tribe's imposition of their values onto the southern tribe, as well as Hakoda's complicity in the matter. Their leader, Gilak, expresses his belief that Malina and Maliq have a hidden agenda, before Katara and Sokka escape the group and return to the city. During their escape, the pair run into Thod, Gilak's second in command, who tells them of a story of a snow rat with the ability to talk and walk on two feet who endeared himself to a human tribe, only to be rejected by them when he asked to be given equal status to them. The siblings and Maliq enter the tent where Malina is recovering with Hakoda by her side, only to discover the pair of them