Back in Amestris, an alchemic prison break by Melvin Voyager, who was a few months shy of his parole, has the Amestrian military confused until they discover a newspaper that has had something removed. Cue clue #1. The removed piece is actually a photograph of an older Julia Crichton being arrested by military police. Further investigation reveals that she's being detained in Table City, which lies on the border between Creta and Amestris in the Western region, and so Edward and Alphonse are sent out by Colonel Mustang to investigate.

While en route via train, the train is attacked by wolf chimeras, and while Ed is fighting on top of the train, it's once again attacked by a glider-riding group calling themselves the Black Bats. The train goes out of control, and despite their best efforts to stop it, it slams into the station.

Once in Table City, Ed and Al are just in time to witness Julia's prison break, and get pulled into a battle between Melvin Voyager (who was on the train) and the Bats. Ed and Al are separated when Al attempts to save Julia from falling, but ends up following her right off the cliff into the valley below, with Melvin on their heels.

She, Melvin, and Al are helped by the people who live in the bottom of the valley and it's revealed that not only is Julia the leader of their resistance force and the Bats, but they're searching for something, something Ed and Al know quite well: the Philosopher's Stone. Only they call it something else, because it's just as shrouded in myths and stories in Milos as it is in Amestris. Apparently the people of the valley are all that is left of the people of Milos. When It was discovered that the Philosopher's Stone was said to appear in the city in random locations, Creta wanted it so they took control of the city and enslaved the people to find the stones. Not long after, Amestris stepped in and pushed Creta out... but still enslaved the people.

Meanwhile, Ed manages to get into the valley and locates Al who is with Julia and Melvin, only to discover they've been followed. A chimera attacks, Melvin's reason behind his jailbreak is uncovered, and the Elrics say their temporary farewells while Julia preps the Bats for combat in hopes of freeing Milos from its military occupation.

While all of this is going on, Colonel Mustang, Lieutenant Hawkeye, Winry Rockbell, and handful of troops enter the city as the Bats' attack is underway. Despite all of her best efforts, Julia's main assault fails and another Philosopher's Stone is born. Throw away everything you know about how it's done, because this place works on an entirely different line. It's like Laboratory 5 in 3D.

The villain of the story - the one who murdered the Crighton family - appears, and Julia takes matters into her own hands despite the fact that Ed and Al are constantly trying to dissuade her, ingesting the Philosopher's Stone and using its power against her enemy. There's also a "cameo" appearance by Roy and Riza, though they don't do much, and with good reason as the movie takes place around episode 20 of Brotherhood and Roy hasn't healed from his battle with Lust yet. Eventually, the city is liberated from its military occupation, the people from the valley rising up to take control, declaring the city of Milos to be its own nation, and those from Amestris head back to their own country to take care of the paperwork while the Elrics stick around a little longer before they, too, head off.

The final scene is of them on the train as Table City, now Milos, disappears from view behind the mountains.