"Liar Liar - Episode 3" begins with a confrontation between Kugasaki Seiran, the leader of the Self-Made Holy Knight Brigade, and Shinohara Hiroto. Kugasaki challenges Shinohara to a game, on the condition that the loser may never challenge Empress Saionji Sarasa again. Shinohara accepts the challenge, paving the way for a high-stakes game.

The game, known as the "Self-Made 27-Form Game," involves collecting cards numbered 0 to 19 scattered across District 4. Players then face off in a reveal phase, turning over one card at a time, with the highest number winning each round. The game is known to favor higher-ranked players, and in the history of Academy Island, no one-star player has ever defeated a five-star player.

Shinohara, a one-star player, is at a clear disadvantage against Kugasaki, a seven-star player. Kugasaki has the ability to increase the value of his cards, making it nearly impossible for Shinohara to win. However, Shinohara and his allies devise a strategy to hinder Kugasaki's movements during the collection phase, hoping to assemble a winning hand.

Meanwhile, Shinohara learns that Saionji Sarasa, the Empress, was not kidnapped as believed. Instead, she was taken to the mainland by her double, Rina, who wanted to fulfill Sarasa's wish of attending a normal school. Despite this revelation, Shinohara decides to continue the game to protect Rina's lie.

As the game progresses, Kugasaki gains a significant lead, collecting 16 cards, while Shinohara struggles to find any. However, Shinohara manages to alter the game rules through a display error, causing confusion and buying some time. He tricks Kugasaki into believing the game has ended due to the rule change, when in reality, it is still ongoing.

In the end, Shinohara wins the game by exploiting the rules and Kugasaki's assumptions. Despite his injuries, he celebrates his victory, proving that even a one-star player can overcome the odds with clever strategy and determination.