The script can be read here but below is a synopsis.
Venger flies through a stormy sky on nightmare and dismounts on a mountain top where a skeletal Dekkion is waiting for him. Dekkion claims he has found the Circle of Power after centuries of searching and points out to the nearby Lost Tower of the Celestial Knights, saying it is inside but beyond both their reaches as only one who is pure of heart and could be a Celestial Knight can enter the tower and survive its test of courage, and as Venger will never release him from his skeletal curse he is unable to retrieve it. Undeterred, Venger says he knows of six young ones who are pure of heart, referring to the heroes.
Meanwhile, the heroes are crossing a rope bridge over a chasm when they encounter Dungeon Master who tells them that a possible way home can be found within the Lost Tower but that they will have to overcome what they fear the most. He disappears in a lightning flash and the heroes continue to the other side of the chasm.
There they encounter Dekkion who startles Eric and fires a mystic bolt at him when he recoils in fright. The heroes battle him with Eric conjuring a telephone instead of a teleportation spell but Dekkion has the advantage until an invisible Sheila steals his magic sword from its scabbard. Dekkion then claims he wants to talk. Hank agrees but holds onto the sword as insurance.
Dekkion explains that he was once a Celestial Knight, a band of mystical warriors who roamed the skies on war-birds and fought evil. He says he is the remaining knight and that an evil wizard turned him into a skeleton. He wants the heroes to retrieve the Circle of Power for him so that he can break the spell and that he cannot enter the tower himself, as the curse forbids it. The heroes agree to help as the tower is the same one mentioned by Dungeon Master.
They arrive at the tower and marvel at how impossible thin and tall it is. Bobby breaks the padlock off the door and inside they marvel again at how it is bigger inside than outside. Dekkion says he will wait for them at the ruins to the east.
Inside the tower are gargoyles. One of the gargoyle's eyes glow red as they pass and Presto comments that he feels something is reading his mind. Most likely this is the tower using telepathy to determine their greatest fears. One of the gargoyles grabs Sheila's cloak before a hole opens up in the ground and she falls into the monophobia dimension where she faces her greatest fear of being alone.
Hank decides to go off on his own and the archway seals behind him. Presto attempts to conjure the barrier away but in a puff of smoke he and Eric are teleported into a forest instead. The barrier is impervious to Hank's energy arrows so he decides to go up a staircase instead only to have the stairs dissolve away behind him, revealing a star-speckled space. Racing up the stairwell he laments his poor leadership.
Meanwhile, in the forest Eric is attacked by a sheet phantom that instead of suffocating him metamorphoses his face into a nerdish visage. A banshee then flies by and steals Presto's glasses which is his greatest fear as he cannot see without them. More banshees descend and start mocking Eric's new appearance as ridicule is his greatest fear.
Diana and Bobby find themselves in a hall of mirrors. Uni is curious to find that one of the mirrors does not reflect her reflection and then is startled when a monstrous face appears in it. Hearing her bleating Diana and Bobby investigate and see their reflections as crone and infant respectively. Then they, like their reflections, metamorphose into a crone and infant, which are their greatest fears. Monsters with the face that Uni saw earlier emerge from the mirrors and menace the helpless duo.
Hank fails to outrun the dissolving stairs and tumbles through space only to land in the tower's treasury where he finds the Circle of Power. He is about to retrieve it when he hears his friends' fearful cries. Removing a drape from a pedestal he finds a crystal ball that shows him the plight of the other heroes and he breaks down crying as he has failed them as a leader. Then he remembers Dungeon Master's previous words and realises that the tower is creating illusory fears.
Using the crystal ball to communicate with his friends he tells them that their fears are just illusions and the stricken heroes appear in the treasury with the tower's illusory effects reversed. With Presto managing to find his glasses and conjure a battleship to block the swooping banshees before he rejoins the others. Hank grabs the Circle of Power and the heroes rendezvous with Dekkion at the ruins.
Hank is about to give Dekkion the Circle of Power when Dungeon Master intervenes and tells the heroes Dekkion's history and how that centuries ago Dekkion led the battle-weary Celestial Knights into a trap in exchange for a king's treasure, adding that evil deeds return to their owner and that the evil will never end until the circle is broken.
Before they can properly debate whether to give Dekkion the Circle of Power or figure out a way to use it to get home Venger arrives on his nightmare mount, firing mystical bolts and grabbing the dropped Circle of Power. Venger refuses to reverse Dekkion's curse claiming that Dekkion did not give it to him and that he seized it himself and as mocking consolation says that he will soon have six more skeleton warriors as company. He then zaps Hank who begins a skeletal transformation but is rescued by Dekkion. Enraged, Dekkion fires a beam from his sword that hits Venger and makes him drop the Circle of Power. Venger and Dekkion then battle, exchanging mystic bolts.
Remembering what Dungeon Master said earlier about evil not ending until the circle is broken Presto retrieves the dropped Circle of Power and Hank destroys it with one of his energy arrows. The destruction causes a vortex that sucks Venger and nightmare away reverses Dekkion's skeletal curse, transforming him back into a young man.
Blowing a conch, Dekkion summons a war-bird and, thanking the heroes, promises to return if he ever finds a way home for the heroes. He then flies off with Eric doubting that they'll ever see him again.
Trekking off during dawn the heroes speculate that Dekkion redeemed himself and broke the curse by siding with them instead of Venger.