Finally released from Avalon's spell, Goliath, Elisa, and Bronx arrive back in New York, only to discover that 40 years have passed, and many things have changed for the worse.
New York City is hell but the humans no longer fear the Gargoyles, as they've got better things to be afraid of.
As the skiff carrying Elisa, Goliath, Angela, and Bronx makes its way through the fog as they wonder where Avalon will send them next, it is then that, at one point, Goliath is struck by lightning and blacks out.
When he recovers, the others point out the Statue of Liberty emerging from the fog, indicating they've returned home to Manhattan, but as they get closer, they find that Lady Liberty has seen better days as she is in very bad shape. Worse is to come when they are attacked by what appear to be improved and stronger versions of the Steel Clan, which destroy the skiff and leave them adrift, kidnapping Elisa and Angela as well, leaving only Goliath and Bronx to then be rescued by a boat driven by an older Matt Bluestone with Claw, who has lost his wings, with him. As they return to Manhattan, they find it has become a desolate wasteland, overlooked by the mighty Eyrie Pyramid atop Xanatos' Eyrie Building, with what appear to be cyborg clones of Talon and Thailog armed with hand lasers marching through the streets, showing their threat when they destroy the cart of a homeless woman, revealed to be the daughter of Captain Chavez when they crush and destroy a photograph of Chavez and her daughter underfoot before marching on without a moment's pause. It is then that the Eyrie Pyramid flashes and projections of Xanatos appear, assuring the people of Manhattan not to grieve as, with his help, they will make Manhattan, and soon the entire world, a much better place under his leadership.
Matt and Claw then take Goliath and Bronx back to their hideout, where they reunite with Brooklyn, Demona, Lexington, and Broadway, who are now part of a rebel force against Xanatos, but the years have taken their toll on them: Broadway is blind, Lexington has become a cyborg, and Demona had reformed and married Brooklyn. They soon learn that Alexander is in battle with his father at this moment, but as they watch, Xanatos murders his own son in cold blood, and Hudson died fighting Xanatos some time ago. Despite the odds being against them, they decide to assault the Eyrie Pyramid before Xanatos can carry out his master plan.
Once inside, Goliath is with Lexington, Broadway, Brooklyn, and Demona, while Bronx is with Matt and Claw. However, at one point, Lexington uses his cyborg abilities to find Matt, Claw, and Bronx surrounded, before the three are vaporized by Xanatos' forces. Soon they are assaulted, with Lexington being kidnapped, and Broadway being fatally wounded. Now with only Goliath, Brooklyn, and Demona left, they soon are brought into cyberspace to face Xanatos, who has Elisa and Angela hostage there, before he uses the area to make the sun come up, turning Goliath, Brooklyn, and Angela to stone, while Demona, due to Puck's spell, turns human. Xanatos then mercilessly kills Brooklyn and Angela while they are stone, while Demona tries to fight back in her human form before being slain herself. Goliath then is able to outsmart and apparently kill Xanatos, before he and Elisa are returned to the real world. However, they soon learn that Xanatos had really died back when he fought Hudson, and the real mastermind of Xanatos' plot for world domination was Lexington, having lost his mind in the time Goliath was gone and turned into a cyborg psychopath, intending to ensure Xanatos' plan goes ahead as scheduled via the Xanatos Program that Goliath had thought he had just defeated in cyberspace. Despite Goliath overpowering him and throwing him into the master computer, setting off a chain reaction that kills Lexington and destroys the Eyrie Pyramid, it is too late to stop the Xanatos Program from infecting every computer system on Earth.
After crashing to the street below, Elisa pleads with Goliath to give her the Phoenix Gate so they can go back in time and prevent the Xanatos Program from being unleashed. Goliath initially agrees to do so, but then hesitates, suspecting foul play. At that point, his plans falling apart, Puck is forced to reveal himself as having been Elisa in disguise and the whole future being an illusion Puck created to get his hands on the Phoenix Gate as a way to avoid having to return to Avalon for the Gathering now that Oberon and Titania had returned by using it as a bribe to get out of attending it. After Goliath and Puck exchange words and how Goliath would like to be returned to reality, Puck simply tells him to wake up.
Goliath awakens back aboard the skiff, with Angela and Elisa explaining that he had been out for some time and they were worried. After explaining what happened while he was unconscious, Goliath decides that the Phoenix Gate is too dangerous to stay with him, and summoning the portal it uses to travel through time, Goliath tosses the Phoenix Gate into the portal, to be lost forever in the time stream. Though Angela and Elisa are a little concerned about Goliath's decision, he knows it is for the best, and suggests that they head for home, praying Avalon sends them there before the dark future Puck showed him comes to pass...