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The episode starts off as Jake, Grandpa and Fu Dog are on their way to the train station. Jake is wondering how they are going to take the train to a magical world, but Grandpa says they are taking the elevator, Jake still gets confused. When Grandpa presses the elevator buttons and switches it the elevator comes with a magical creature helping them with the bags. Fu Dog tells Jake to hold on, and the elevator goes downward really fast. On the magical world, Jake meets all the dragons, but he also meets the Australian dragon who is snob and loves playing pranks just like Jake they spend their whole day pulling pranks on each other.
Later, Grandpa and Jake go meet the dragon council, who tell them that they have to take a serious of events to pass so Grandpa gets to stay with Jake because they never allowed him to be Jake's master because they don't want any relatives training a young dragon, so to stay with Grandpa he has to pass three tests, Courage in Flight, Knowledge in Battle and Using Dragon-Fire.
First test is Using Dragon-Fire, this test is shooting fire balls at Ice Sculpture, he is suppose to fire at the bad guys and not fire the good guys. But since he had a sneezing powder, it went off that Jake started sneezing and he shot fireballs at the good guys and he failed. His Grandpa got disappointed at him.
They later were training for the second test, Knowledge in Battle. When the battle starts, Jake has to fight the Brownies. He uses what he always use "Plan Jake" but as the test says you have to have knowledge to win. When Brownies are winning, Jake thinks and remembers that brownies like shiny things, he makes the dirt shiny by shooting fire balls and catches the brownies, and he passes.
Later, he takes the test Courage in Flight. Jake chooses the Australian dragon as his opponent, when Jake and his opponent are flying, the Australian dragon does mean stuff to get Jake off guard, but when Jake has him beat, the Dark Dragon accidentally captures the Australian dragon when Jake was his target, Jake goes in and saves the dragon, but he fights the Dark Dragon, the Australian dragon helps him and they leave, but unfortunately the Australian dragon wins.
In the finish line, Jake tells everyone that he went in to save the Australian dragon because the Dark Dragon attacked them, when the Australian dragon says that that is true, Jake gets extra points to pass the Using Dragon Fire test. Chang gets mad, but Jake just drops the Dark Dragons claw.
When Grandpa and Jake and Fu Dog are leaving Grandpa acts serious because the Dark Dragon knew too much about the test, that there is a dark spy working with them. When Jake is about to leave, him and the Australian dragon shake hands and pull a last prank and the same one at each other. The episode ends on that.