During a festival celebrating the 25th anniversary of Marlena arriving from Earth, Adam encounters demons sent by Skeletor. Rushing to the Cave of Power, he discovers that Skeletor, not The Goddess, waiting for him. He-Man learns that Skeletor has captured The Goddess and, in exchange for her freedom, requires three magic amulets representing the sea, the sky, and the cosmos. Skeletor intends to use the amulets to find both halves of the Sword of Power (as He-Man doesn't yet have it).
They soon discover that another is on the trail, as demons attacked the wizard Tarrak, taking the cosmos talisman. Meanwhile, the beastmen attack the city of Avion, searching for Stratos. He escapes into the air, only to be followed by the beastmen on dragons, but Tarrak causes him to become invisible and he escapes. Once Stratos lands, He-Man notices the necklace worn by Stratos is the sky amulet!