Once in Central City, Ed and Al move into the vast mansion of the Sewing-Life Alchemist Shou Tucker and begin to prepare for the Alchemy exam.
Full Synopsis: Plot Details Follow
Ed and Al arrive in Central and begin their preparations for the Alchemy Exam while staying with Shou Tucker, a famous State Alchemist who specializes in creating chimeras(still in Ed's flashback). During the long period of studying Ed, Al, and Tucker's daughter Nina are invited by Maes Hughes to his house to celebrate Edward's birthday. However when Hughes pregnant wife Gracia Hughes starts going into labor, the three are left alone with her while Maes goes out to find a doctor. Ed heats water without a Transmutation Circle, shortly before Maes returns with the doctor and their daughter Elicia Hughes is born. Before the exam Shou Tucker mentions the exams are tough and out of a dozen candidates only a maximum of two candidates are chosen from the results of three different exams to become a State Alchemist.
After the written exam, Al is forced by Mustang to drop out of the course before the physical exam to avoid revealing his body is hollow. Al protests, but Ed agrees with Mustang, not wanting his brother to become a slave of the military like he is soon to become. In the practical course of the exam, the first man makes a huge pillar, but is so exhausted he rests in front of it. The next man uses water and trees to make a hydrogen blimp. However, the pillar causes the blimp to puncture which also causes the pillar to break, and Ed rushes to the rescue. Without the use of a transmutation circle, he reverses the falling pillar and blimp before they can crush the people underneath, and turns them into flower petals. This puts him at the level of State Alchemist.
The events in this episode mark the first time (chronologically) Ed transmutes by clapping. In the manga and Brotherhood anime, Ed discovered this immediately after learning to use his automail.
In the report from Shou Tucker that Roy Mustang is holding just after the opening, the nation of Britain is mentioned twice, despite the story taking place in an alternate world that does not include the nation of Britain. The report itself reads like an excerpt from a textbook, describing the Scientific Revolution and advancements made in that time.
Mustang's silence when asked about Shou's wife indicated he either suspected, or was fairly certain of, what Shou had done to her.
The Elrics assistance in helping Gracia Hughes give birth to Elicia is based off the their involvement in the witnessing of Satella LeCoulte giving birth to her son in the manga and 2009 anime. However, while Winry, who was present in that version, helped Satella deliver her baby while the Elrics watched, the Elrics helped Gracia deliver Elica in the 2003 anime.