Pupils Reunited is an event that takes place during the Galuna Island arc.
After Natsu stomps on the floor of an ancient temple, the floor breaks revealing a passage underneath. The Fairy Tail Mages discover an ancient, gigantic beast in a frozen state. Surprised, Gray tells them that the name of this fearsome-looking creature is Deliora.
The group hides as the hear footsteps approaching. Two strangers appear and the group eavesdrops on their conversation about something called the Moon Drip. They are joined by a pink-haired girl, claiming that some strangers knocked her dear Angelica out. As a result, they decide to eliminate the intruders as they should not find out about their mysterious plan. They shortly leave to meet their master, Reitei. Later, Gray Fullbuster hears Lyra, one of Lucy's Celestial Spirits, sing a song and recalls memories about his teacher, Ur. Soon after, the moon rises, shining on Deliora, resulting in the Fairy Tail Mages exiting the ruins to investigate the issue.
Above, the team finds some persons with masks around the light, doing some sort of a ritual. Lyra tells Team Natsu that this is a spell named Moon Drip; which the strangers are using to revive Deliora. Gray interjects, stating that this ice cannot melt. However, Lyra says that this particular spell can melt the ice. The Fairy Tail Mages conclude that the curse on Galuna Island is due to this spell, contaminating their bodies.
Suddenly, a weird masked man is seen walking towards the ritual accompanied by the two strangers from before who, were inside the cavern. The pink-haired girl tells the masked man that they were unable to find the intruders during daytime. Team Natsu guesses that the mask man is Reitei. The two strangers tells Reitei that Deliora will be revived by tomorrow. With the intruders not found, Reitei orders his subordinates to obliterate the village.
Hearing Reitei's voice, a bewildered Gray recognizes the man. However, Natsu's impulsive nature takes over, causing him to charge at the enemy. The strangers see their guild marks, concluding that the villagers called for their help. Reitei re-orders them to destroy the village and, an angry Gray uses his Ice-Make on Reitei who, counters it with his own Ice-Make Magic. Gray calls him Lyon and the latter, also knowing Gray's name, replies that it has been a long time.
Natsu charges at the strangers who leave to destroy the village. However, he is suddenly stopped as he is trapped by Lyon's Magic. Happy takes Lucy, telling her someone has to save the village. Happy and Lucy are both worried for Natsu but are convinced that Natsu would overcome any obstacle.
Back at the fight, Natsu trapped in ice, is kicked by Gray and falls down the cliff. Gray did so due to the Magic on Natsu being able to destroy his body so, he sent him out of Lyon's Magical range. Gray asks Lyon why is he trying to destroy Ur's seal, for which she gave her life. However, Lyon tells Gray that he was the one who killed Ur, removing his mask, revealing his face.
Whilst Gray and Lyon battle, Natsu attempts to melt the ice but fails to do so. At the same time, Titania makes her way to Galuna Island on a pirate ship, determined to punish Natsu and the others for breaking the rules.
Meanwhile, at the temple, Gray and Lyon engage in battle, ultimately ending with Lyon defeating Gray. Later on, Gray wakes up while being carried by Natsu, who is still frozen in the ice. Remembering the day Ur and Lyon tried to stop him from confronting Deliora, as well as when he tried to prevent Natsu from going on the S-Class job, he starts to cry. Natsu yells for him to stop crying, declaring that they are Mages of Fairy Tail and don't surrender, as they make their way to the village.