At Gateway City, a huge city in the Demon Realm occupied by the Humans, Hero, addressing himself as Black Knight, saves a Demon barmaid from being harassed from Crusaders and learns from her how most of the Human army have mistreated the Demons since occupying the city except those who guard the Eastern Fortress. Meanwhile, the expeditionary fleet sent to recapture Aurora Island is a disaster no thanks to their incompetent commander the White Night King when Demon Krakens destroy most of the fleet with only a few survivors, including the Winter Prince, whose father is killed saving the White Night King. Back in the Southern Nations, most of the Southern leaders are disgusted with White Night King, who refuses to take responsibility for his failures and tries to blame it on the late Winter King.

The Crimson Scholar offers plans to the Winter Kingdom to capture Aurora Island. Hero liberates Gateway City by terrifying the nobles to an extent which makes them flee the city. The commander flees after selecting the new commander of the city, of which this new commander decides to make Gateway City a new government that allows humans and demons to live together. The Crimson Scholar unfolds the plan to create an artificial land bridge linking the Winter Kingdom and Aurora Island. After capturing the beachhead, they learn that the Ice General is currently awaiting to be besieged, with an army of 8,000. However, the Winter Kingdom only has an army of 12,000; when normally three times the amount, 24,000, is necessary to successfully siege a castle. However, Hero arrives with a grand army of 9,000 of the best soldiers the Humans have. These soldiers are actually those who had fled the Gateway City, led by the previous commander of Gateway City to aid the Winter Kingdom.

As the second summer arrives, the Winter Kingdom has improved significantly with the Crimson Scholar sending one of her students, the Merchant Youngster to help the Winter King. After training with Female Knight and tasting Younger Sister Maid's carbonated drink, the Hero heads back to Gateway City as the Black Knight to attend a festival. While feasting with the Eastern Fortress General, the Fire Dragon Princess, daughter of the Archduke Fire Dragon, arrives much to Hero's chargin as the Princess considers herself as the Black Knight's wife. Realizing time is running out for her, the Scholar brings Hero along with Elder Sister Maid, whom has become her apprentice, to the Iron Nation to show a new invention that will improve the education of the humans, the Printing press.

Young Merchant pays a visit to the Crimson Scholar's villa and by her instructions, Elder Sister Maid tries to impersonate her with the magical ring, but is unable to deceive him. Hero then intervenes and takes him to the Demon realm where he shows him that the now liberated Gateway City became a thriving metropolis inhabited and ruled by humans and demons alike and have the Fire Dragon Princess hold a banquet to them, where he offers him the right to explore the commerce in the city in exchange to help in his and Demon King's efforts. Meanwhile, the Queen has a short meeting with Female Magician at the Royal Library, before entering into the ritual chambers, instructing Head Maid to kill her should she loses her sanity in the process. Back at the villa, Female Knight offers herself to be properly knighted by Hero in a sign of offering him her eternal loyalty, to which he reluctantly accepts.

Young Merchant learns from his sources that the Central church and Central nations concocted the heresy charges against Crimson Scholar as her work was helping the South being free from Central's influence. Taking action, he has one of Scholar's students, the Noble Youngster, help in his plans. Meanwhile, an Emissary of the church arrives to take Scholar into custody, unaware that she is in fact Elder Sister Maid in disguise. Before a huge crowd, she is accused of heresy, chained and tortured, as Hero awaits for the opportunity to rescue her, but just when Elder Sister Maid is given the chance to speak, she tells everyone she was once a serf. She tells her story of how she lost most of her family during her days of serfdom and until thanks to their deity, the Spirit of Light, she was saved upon offered a chance to rise and stand as a proper human.

The Southern kingdoms join forces to defy the Central nations by ending serfdom and lower taxes to encourage people to immigrate to the South and the Lakeside Convent separates from the Central Church to form the True Church of the Light Spirit with pamphlets and bards spreading their message. Meanwhile, Young Merchant begins buying wheat from the Central nobles with futures contracts which causes food prices to rise as part of his plans. Fearing their food supplies will run out if Central continues importing their food, the South enacts trade tariffs and taxes on exports. Meanwhile in Gateway city, Fire Dragon Princess informs East Fortress General that the Blue Demon clan are up to something while she later meets with Young Merchant in the Human Realm to buy salt as the demons are running out of salt.

As Young Merchant and Fire Dragon Princess learns that Central intends to install a new currency to prevent inflation, Winter King and Hero are informed an army lead by the Blue Demon clan has emerged from the portal to the Demon Realm and intends to attack from the south. Hero departs to confront the Blue Demon clan alone, allowing the Southern Alliance to focus on the incoming invasion from the north and much to his surprise, he reunites with Female Magician on the way there. Meanwhile in the Demon Realm, the Queen emerges from the chamber possessed by the spirits of the ancient Demon Kings and Chief Maid manages to push her back inside, despite having her right arm cut off by her. Young Merchant, accompanied by Fire Dragon Princess exposes to Merchant Youngster his intention to have the Southern Nations establish their own currency and extend the Merchant Alliance trade with the Demon Realm.

Hero and the Queen are finally reunited after she manages to keep the ancient spirits at bay and regain control of her body. Female Magician appears before the Winter King and delivers him instructions from Crimson Scholar to develop a vaccine for Smallpox and reveals that reveals herself as a demon. Crimson Commander invades the press building and attacks kill Elder Sister Maid, believing that she is Crimson Scholar, but she is rescued by Warrior Youngster who confronts the invader and have him fall to his death. After restoring Chief Maid's arm, Hero explains the situation to the Queen. Meanwhile at the surface, with their horses sick, the Central Army is stationed with their leaders arguing about the yet unclaimed spoils of the war, until a mercenary force makes the first move. Female Knight leads the battle to quickly defeat the mercenaries, and with the arrival of winter, the Central Army is forced to retreat.