King overpowers and single-handedly defeats Guila using his Sacred Treasure, the Spirit Spear Chastiefol. As Meliodas, Elizabeth, Hawk, Diane, Ban and King return to the village, King tells the others that the Sacred Treasures of the Seven Deadly Sins unlocks each of their full potential in combat. However, Meliodas sold his, Diane lost hers and Ban got his stolen. Meliodas, Ban and King head to the Merchant Town Vaizel during the annual fighting festival, in which the grand prize happens to be Diane's Sacred Treasure, the War Hammer Gideon. Meanwhile, Great Holy Knight Hendrickson summons Jericho and Twigo underground, offering them blood from the corpse of a red demon as a means of enhancing their strength. Twigo explodes after drinking the blood, but Jericho manages to survive the excruciating experience.

Guila and Jericho interrupt the tournament and cause terror upon the merchant town. King subdues Guila and Jericho after Meliodas and Ban are defeated by them, but King is later overwhelmed by Holy Knight Helbram, who was disguised as tournament referee Love Helm. Meanwhile, Elizabeth returns to her normal size and stumbles upon her elder sister Veronica Liones, who scolds Elizabeth for being involved with Meliodas. Veronica then traps Meliodas inside Goddess Amber, a stone specifically made to seal demonic beings. Elizabeth runs away with Meliodas's sword and Goddess Amber, while Griamore temporarily restrains Guila and Jericho. Veronica catches up to Elizabeth and shields her from an explosion made by Guila, which causes Veronica to pass away. When Elizabeth calls out for Meliodas, he emerges from within Goddess Amber with a darker side to him.

With his true power finally shown, Meliodas clashes with Helbram, who takes note on how Meliodas hones his dark abilities. After managing to defeat Meliodas, Helbram steals Meliodas's sword. Ban takes Elizabeth, Hawk and King to safety, while Diane returns to her normal size and wields Gideon with attacks that crumble the earth, forcing Helbram to retreat with Guila and Jericho in tow. Elizabeth embraces Meliodas after he is rescued by Diane, later lamenting the death of Veronica. Ban and King express their motives behind taking back the kingdom. With his sword now stolen, Meliodas vows to end the ongoing war once and for all.

News about several sightings of an Armor Giant somewhere in Ordan Forest reaches Helbram, who quickly sends Dawn Roar, an elite group of Holy Knights, to search for the Armor Giant. Meanwhile, Guila visits her younger brother Zeal, and she later kills three thugs who bullied him for his spare change. Meliodas and his friends split up in the nearby village. Elizabeth and Hawk encounter a boy named Alan, who is looking for some glue to repair armor. Upon hearing the low growls that echo in the forest, Meliodas, Ban and King find the Armor Giant being surrounded by Dawn Roar, but Meliodas, Ban and King are no match against Dawn Roar. Just as it seems that the Armor Giant is about to be slain, Alan intercepts and reveals himself as Gowther, the Goat's Sin of Lust.

Gowther gives the head of the Armor Giant to the members of Dawn Roar in order to convince them to withdraw from battle. However, the demon breaks through the armor and attacks Meliodas, Ban, King and Gowther. Meliodas lowers his guard upon noticing a Holy Knight merged into the demon's chest, but Gowther uses his Sacred Treasure, the Twin Bow Herritt, to stop the demon. Meanwhile, Cain visits Elizabeth in the Boar Hat, where he tells her the story of Liz, a knight from an enemy kingdom who became Meliodas's past lover after he saved her from being sentenced to death. Ban gouges out the heart of the Holy Knight, recognized as Guila's father Dale, yet the demon still remains alive. Elizabeth rushes to Meliodas and gives him Liz's sword left behind, which allows him to destroy the demon. It is realized that Dale was one of Hendrickson's failed demon experiments.

Gowther is welcomed by the others into their group, but he soon finds out the true secrets behind them by delving deep into their memories and emotions. Meanwhile, Hendrickson and Helbram have the hilt of Meliodas's sword in possession, in which they plan to use it as a fragment of a ritual relic, known as the Coffin of Eternal Darkness, to resurrect the red demon race as a means to start a holy war. At the Boar Hat, Holy Knight Vivian suddenly appears and kidnaps Elizabeth and Hawk. Diane throws Meliodas, Ban and Gowther toward the Kingdom of Liones, where the three are bombarded by an army of Holy Knights on the north side of the castle. However, Arthur Pendragon, the young king of Camelot, has approached the south side of the castle with his own army.

Hendrickson tries to convince Arthur to leave the castle, but to no avail. Instead, Hendrickson escorts Arthur inside the castle and suddenly engages him in battle. Meanwhile, Elizabeth and Hawk are teleported inside the dungeon of the castle, and they try to find a way out. Meliodas, Ban and Gowther manage to defeat the army and sneak inside a town of the kingdom, while King summons his black hound Oslow to use its mouth to teleport Diane inside the castle. However, Diane is attacked by Guila, Jericho, Gilthunder, Howzer, Helbram and Great Holy Knight Dreyfus. Diane tries to defend herself, but Dreyfus overpowers her with an attack that sends her crashing onto the town streets. After Diane wander the streets and protects Zeal from being crushed by a falling building, both Howzer and Guila switch sides to defend Diane.

The combined powers of Howzer and Guila have little to no effect. When Dreyfus attacks Guila, Gowther saves Guila in the nick of time and faces Dreyfus alone. Meanwhile, Elizabeth and Hawk encounter Margaret Liones, Elizabeth's eldest sister, in a cell. Vivian appears, teleporting Hawk elsewhere, knocking Elizabeth unconscious and releasing Margaret from her cell. Gowther traps Dreyfus in a nightmare, but Dreyfus somehow snaps out of it and pierces Gowther in the chest. Once a heavily injured Dreyfus leaves with Gilthunder, Helbram attempts to finish Diane off, but King appears and stops Helbram, who reveals himself as a fairy and King's former best friend. Helbram uses his magical tree roots to restrain King and inflict brutal lashes on Diane. However, King uses Chastifol to shield Diane from getting hurt. King says that he is fulfilling a promise that he made seven hundred years ago.

The King reminisces over some old memories of a time Diane and King spent together when Diane was still a giant child. Back to the present, King fights Hellbram, while in a different location Hendriksen fights Arthur.

Gilthunder leaves Dreyfus to fight Meliodas alone, while Hendrickson deals with Arthur and ultimately defeats him. Meanwhile, Elizabeth wakes up in a chamber and finds her father, King Bartra Liones. Meliodas then finds himself outmatched against Gilthunder, Hendrickson and Vivian. At the same time, Margaret decides to take her own life by jumping off a castle tower. Margaret and Gilthunder are both released from their curse in the form of monsters, thanks to Meliodas. While Margaret is thus saved from falling, Hendrickson tries to finish Meliodas off, but Gilthunder stands in the way and knocks down Hendrickson at full force. Vivian tries to trap Meliodas, Gilthunder, Margaret and Arthur in illusionary places, but Merlin, the Boar's Sin of Gluttony, makes her first appearance and breaks the spell.