Yugi has started to grow more afraid as time goes on hoping to fight against the presence that occasionally takes over his body. His grandpa brings Duel Monsters to the game store, a new game that's quite popular. Yugi proves to have a natural talent for it. He shares that his grandpa duels as well, and even has a rare card from when the game was first introduced. Seto overhears and follows them to the store wondering if it's Blue Eyes. He finds that it is and tries to bargain for it. Grandpa Muto refuses angering Seto. Yugi brings the card to school the next day to show to those that couldn't come to the shop. Seto tries to switch it with a fake to take the real one for his own. Yugi notices and confronts Seto about it. Seto gets angry and challenges Yugi to a duel for it. The Puzzle Spirit takes over in anger of Seto's casual disregard for the card monsters and the threat to his host. He turns it into a shadow game where the real shadow spirits fight for them.
Seto tries to cheat and use the Blue Eyes he stole. The Blue Eyes refuses to fight for him when she belongs to someone else. Instead she attacks Seto and he loses the game. As punishment the Puzzle Spirit traps him in the shadow realm with the shadow spirits he abused in his search for power. He's badly attacked. When Seto escapes he's invigorated. He refuses to give up and decides to design a game similar to the one with 'Yugi' so he can again challenge him and this time take Blue Eyes for his own and teach him not to mess with a Kaiba.
Ryou Bakura transfers into Yugi's school. Ryou is no longer trying to make any friends, believing that if he can avoid people the Spirit in his Ring won't hurt them. His plan backfires when the gym teacher attacks Ryou and Bakura defends him. Yugi tries to make friends with Ryou. The presence of the Puzzle stirs memories inside Bakura. He remembers that he's seeking for revenge for his kin and his purpose to collect the seven Millennium Items. Ryou shivers sensing the spirit waking up and tries to back off. Bakura's furious that Ryou would try to escape this and attacks Ryou with the Ring digging the gold spikes into Ryou's body. For the first time Ryou's hurt by his closest treasure. Shocked Ryou retreats wondering why the Ring would hurt him after all this time. The Voice tells him that Yugi and his friends will soon join their collection. Ryou tries to fight it realizing the Voice and the Ring are connected, but Bakura still takes over and invites Yugi and his friends to a game of Monster World, Ryou's favorite RPG game.
Yugi doesn't realize it's a shadow game until his friends start being sent into their miniatures. Knowing that the spirit in his body will help he asks to be sent into his miniature as well. The Puzzle Spirit faces off against Bakura. Bakura's shocked to learn that the pharaoh's around as well, and struggles to remain focused on the game against the one he's sworn revenge against. Ryou manages to wake up partway through the battle and manages to seize control of Bakura's left hand. Bakura's furious. Zorc tells Bakura to punish his host and make sure he can't interfere again. Influenced by the demon Bakura stabs Ryou's hand onto a tower permanently scarring the hand and causing his host to lose blood and be too weak to interfere again. It takes time before Ryou manages to fight his way forward enough to help again. With Ryou's help Yugi's group wins and Bakura is banished.
Zorc uses his power to make sure the banishment isn't final leaving Bakura a way back to the Ring. Ryou's happy at first that the souls in the figurines are gone, but Yugi's group is busy and doesn't have a lot of time for the silent foreigner. Even worse, Ryou finds that he no longer has enough money to keep living where he is. He's struggling to pay rent, and often goes hungry. He does his best to work, but it isn't long before he puts the pieces together. The spirit from the Ring wasn't just possessing his body to trap his friends, he was using it to make money as well. The one being he could always count on, The Voice, is gone now. He only has days before he's permanently evicted from his apartment, and Ryou knows his father won't be able to help, far away on the other side of the world and rarely even remembering that he has a son. Bakura returns just before he's thrown out and 'saves' his host, destroying the landlord and bringing in the money Ryou needed to live. Grateful Ryou decides to try and keep Bakura. Yes the spirit's not nice, but he's the only one Ryou can rely on, the only one that knows Ryou's past. Maybe if he just stays away from Yugi and the others it'll be okay.
Seto's revenge is finally set and he invites Yugi and his friends to a dangerous game, Death-T. Yugi learns that his grandpa had been captured and used to take the Blue Eyes, Seto destroying the card that he couldn't have for his own. The puzzle spirit's presence grows stronger as the game goes on, Yugi fighting trying to prevent him from taking over. At last the spirit and Yugi go into a confrontation, Yugi revealing he's terrified of the spirit's actions. The spirit backs off, wondering where he went wrong to make his host so scared. The spirit resolves to help Yugi from a distance now. Together they manage to defeat Seto. Yugi reluctantly accepts the spirit's help against him as long as he's able to remember what the spirit does when he takes over and the spirit stops killing. He names the spirit Yami, darkness. Seto's mind is crushed as punishment for what he did, forcing Seto to pick up the pieces and put himself back together again. Yami assures Yugi Seto will recover, Tea starts developing a crush on Yami. An odd balance develops. Yami does his best to exploit Yugi's limitations, still quite violent and prone to making those that attack Yugi insane, but their relationship is better as Yugi watches Yami now.