Anne and her friends stage a dramatic reenactment of the tragic legend of „Lady Elaine“ from the Arthurian lore in the summer. Anne takes on the role of Elaine and lets herself drift down the river on a leaky wooden plank to mimic the death of the heroine. The boat sinks, and Anne is in mortal danger but is rescued at the last moment by Gilbert Blythe. Despite his apology and offer to become friends, Anne stubbornly refuses to let go of her dislike for him.

In parallel, Anne reflects on her mistakes—such as the failed hair-dyeing attempt—and resolves to chase less „romantic nonsense.“ Miss Stacy announces the establishment of a Queen’s class to prepare gifted students for the entrance exam to the Academy. Anne eagerly participates, while Diana cannot join due to family decisions, marking their first major separation.

The girls discuss their life goals: Ruby dreams of marriage, Jane of a teaching career, while Anne, after initial uncertainty, decides to become a teacher like Miss Stacy. Miss Stacy herself dispels rumors about her departure and reaffirms her loyalty to the students. The episode ends with Anne’s new goal of striving for the Queen’s exam and a dramatic cliffhanger as Matthew suddenly collapses.