Classmates Alice, Julie, and Reika wonder if that was Lain they saw at the nightclub Cyberia. To find out, they invite Lain to go with them to the club.

Still shaken by the information she received from the Men In Black, Lain discovers that she is being blamed for spreading an ugly rumor in the WIRED. Is what the MIB said is true; is she another person in the WIRED? Or is she doing it herself? Lain must find out or risk losing the one true friend she has.

Lain struggles with her identity. Is she a human being, or just a hologram? And are the Knights responsible for the Evil Lain? Lain decides to deal with the Knights once and for all.

Troubled by what she saw, Alice decides to visit Lain at home and find out what is going on. Meanwhile, the two MIB agents receive a terrible shock and Eiri reveals his real motive for removing the barrier between the real world and the WIRED.

The world is crumbling, people are dying and Alice's sanity is threatened. To save humanity, there is only one thing Lain can do; she must make the ultimate personal sacrifice.