While distracted by the power of feelings surging through Juvia Lockser and Meredy in their battle that had been seeping through Gray via the Three Spread Sensory Link, Ultear, who he had been stalking, sneaks up behind him, asks if he'd been following her, informs him that she is Ur's daughter and claims that she is an ally and has no grudge against him. He is not convinced of this and is furious about them using Zeref to create a meaningless world. He looks surprised when she suddenly admits that everything she has done is Ur's will.
Their conversation is interrupted when Azuma destroys the Tenrou Tree and Gray weakens and starts to collapse. Ultear informs him that because of the fallen tree, everyone with the emblem of Fairy Tail gets their strength drained. However, when Azuma is defeated by Erza Scarlet and their Magic is restored, they resume their talk. Ultear tells him that she'll leave the island with Zeref and that only Gray and his Iced Shell can defeat Hades. Gray agrees to this, saying he's fully prepared to lose his life for the guild.
Later, Ultear meets Meredy with Zeref in tow and tells her that Gray is not their enemy, but their trump card. She laughs as she recalls how she was able to fool Gray into going after Hades with a made-up story about her mother and how Ur had wanted to defeat Hades with Iced Shell from the start as revenge. As she prepares to leave the island with a reluctant Meredy, Ultear notices and prepares to kill a passed-out Juvia. However, ice stops Ultear's blade from connecting with Juvia's throat and Gray springs out, taking Juvia out of Ultear's way. It turns out he had not believed a word that she said and he declares that he wants to walk the path where he can live with his allies, even if it was Ur's will that he exact revenge on Hades. Ultear approaches him, admits she didn't want to fight him because she had been her beloved student but he had chosen to be killed in the cruelest way. However, Gray has no patience for Ultear's threatening words and delivers the first attack, an icy punch right into Ultear's face.
Ultear gets up after being hit by Gray and orders Meredy to take Zeref and leave. Gray wakes Juvia and asks her to chase after Meredy. Although in pain, she quickly complies because it's "Gray's orders". While distracted by Juvia, Ultear kicks Gray in the face. She sends her orb coming his way and he retaliates with Ice-Make: Lance. However, Gray's attack evaporates because of Ultear's Magic. He gets over the shock of this and attacks with Ice-Make: Hammer but the same thing happens. Ultear reveals that her Magic, Arc of Time, has the ability to control the time of objects. It is a Magic that she learned in order to kill Creation Mages like her mother. Gray momentarily remembers a memory of Ur, crying over the dress of a little girl. He defends from Ultear's Flash Forward with Ice-Make: Cocoon but the ice evaporates which results to him getting pummeled by the projectiles as Ultear casts Flash Forward. Disgusted by Ultear's words of hate, Gray freezes the ground towards Ultear and tells her that Ur always thought about her.She ignores this statement and she easily overpowers him in an exchange of fists and sends him flying to a stone wall. He gets up, despite the injuries, and vows that he'll strike her down with the Creation Magic Ur taught him. Gray slices the side of his torso with sharp ice, causing him to bleed. He freezes the blood that spurts out and charges towards Ultear. She attempts to make the ice evaporate but is shocked when she couldn't, and then she realizes that it is Gray's blood and she cannot manipulate something that came from a living being. He hits her with his bloody version of Ice Blade: Seven Slice Dance. She is momentarily impressed by his tenacity, but she regains her balance and swears that she cannot lose. Ultear assumes the position for Creation Magic and casts Ice-Make: Rosen Krone, directly hitting Gray.
Ultear pants as Gray falls to the ground. When Gray comments about the similarity of Ultear's and Ur's Creation Magic and how they have the same blood, Ultear is angered and attacks him with Ice-Make: Bloom. Gray retaliates by tackling her, barely missing her Magic Sword and they start rolling on the ground while they argue, Gray asking her what made her like that and Ultear yelling for him to shut up because he won't understand. Their rolling takes them down a cliff and they crash into the water below.
As they fall, Ultear recalls her past. She had been a test subject in the Bureau of Magic Development as a child. Once, she managed to escape the facility and returned home to her mother. However, she had seen her mother with two other kids, Gray and Lyon Vastia, where she had been happy, causing Ultear to think Ur got rid of her and replaced her with those two kids. She returned to the facility in order to acquire the power she needed to take revenge on her mother. That was when she met Hades, learned of Zeref and joined Grimoire Heart to train under Hades to learn of a type of Lost Magic, Arc of Time. While submerged in the water, she tells herself that everything she did was to turn her cursed existence into a life of happiness. She attacks Gray with large ice pieces of flowers, but gets distracted by a voice calling out for help.
She sees a flashback of her mother carrying little Ultear in her arms, asking for someone to help her child who's running a high fever because she had been born with too much Magic Power. Ultear realizes that she is in the ocean, recalls that Ultear's ice melted at Galuna Island and combined with the ocean and thinks with disbelief that she is inside her mother. She sees her mother crying in front of the people she entrusted with Ultear and demands that they give back her Ultear, who they had told her had died. Ultear comments that that's not how she remembered it at all. She suddenly snaps back to reality and sees Gray assuming the position for Ice-Make. He attacks with Ice-Make: Gungnir, finally defeating her.
Gray floats to the surface of the water and tells Ultear a story that Ur once told him and Lyon: when Ultear had been born, Ur felt a light shining into her heart and she dreamed of a bright future for that little girl. Ur had been so happy then by the power of life and she couldn't stop her tears from overflowing. Ultear had been the proof that she lived, "her tear". As Ultear falls down after the ice holding her shatters, she thinks to herself that she wants to go back to the time before she hated her mother. With tears in her eyes, she admits that she just wanted to be with her mother one last time. Later, Gray brings Ultear ashore and lets her rest against a rock as he heads out to look for his comrades for the final battle against Hades.
Later, while walking, Gray is about to collapse out of exhaustion, but is then caught by Erza, who asks him if he's okay. Gray states that it seems that he always needs to be saved by somebody. Erza replies that she's the same, too. Natsu Dragneel's group arrives, overhears the words said, and with a big grin, Natsu tells them that he is the same too. The reunited Team Natsu, along with Wendy Marvell, Carla and Panther Lily, prepares for the final battle against Hades.