Lilo and her classmates are preparing to perform at the local May Day festival. Each student is required to create an original dance. When Lilo learns that her mother won the competition when she was her age she becomes determined to win it. While preparing for the competition, Stitch's past comes back to haunt him. When Stitch was created, Jumba was not able to fully charge Stitch's molecules before they were both arrested. At first, this glitch causes Stitch to revert to his old destructive programming, but it will ultimately destroy him if Jumba cannot create a fusion chamber before Stitch's energy runs out.

Meanwhile, Stitch's seizures are driving a wedge between him and Lilo and ruining her chances for success at the hula competition. Because Lilo is so concerned about winning the competition she fails to understand that what is happening is not his fault; she is too busy trying to get him to help her and completely neglects helping him. Eventually, the two devise a hula based on the legend of Hi'iaka. Lilo gets increasingly angry at Stitch as he ruins their practice sessions. To make matters worse Jumba is having problems creating the fusion chamber due to the fact that he does not have the proper alien technology to build it and has to try building it using ordinary house-hold objects. However, just before the competition, Lilo and Stitch make-up and Jumba finally completes the fusion chamber. Then, Stitch has another seizure and accidentally scratches Lilo; this upsets him so much that he decides to leave Earth, believing himself to be "too dangerous". Lilo finally realizes that something is terribly wrong with Stitch and in the middle of her performance she forfeits the competition to help him.