In the opening, Kaiba Corp. is doing research on the Millennium Puzzle. Suddenly, a mysterious cloaked man is seen at the underground shrine as one of Kaiba's bodyguards tells him that he is behind schedule and to speed up his progress, and that they will find someone who could if he cannot. A year after the departure of the Pharaoh, Yugi Muto and his closest friends are in their fourth and final year of Domino High School and are talking about what they will do in the future.

Meanwhile, Seto Kaiba has commissioned an excavation to retrieve the disassembled Millennium Puzzle from the ruins of the Millennium chamber. The item had previously housed the spirit of his longtime rival, Pharaoh Atem, whom he hopes to "return to life" in order to settle their ancient score. The excavation is interrupted by Diva, who faces Kaiba in a game of Duel Monsters and steals two pieces of the recovered Puzzle. He keeps one fragment and gives the other to his younger sister Sera, who passes it on to Yugi Muto, as he is the only one who can reassemble the Puzzle, being host of the Nameless Pharaoh.

Diva, under the alias "Aigami," forges a "friendship" with Yugi and the rest of his best friends. He takes interest in Yugi's friend Ryo Bakura, whom he believes is responsible for the death of his father-like mentor, Shadi. Using his Quantum Cube, he transports Bakura and Joey to another dimension. Bakura apologizes and explains that the evil spirit of the Millennium Ring had been responsible. The two are interrupted by Mani, who has become warped by the evil energies of the Millennium Ring. When Yugi, Tea, and Tristan find "Aigami", Aigami reveals himself to be Diva, and his plan to eliminate Bakura as well as Yugi. As Diva almost disintegrates the three of them into another dimension, Joey unknowingly returns to the real world, with help of Atem's spirit.

Kaiba has a computer that rebuilds the Millennium Puzzle and discovers the last two pieces are missing. He abducts Diva and approaches Yugi, so he can have the two take part in the showcasing of his updated Duel Disk virtual reality technology. He intends to duel both Diva and Yugi, while gambling their pieces of the puzzle. However, Yugi is furious with Diva over what he did to Bakura and insists he duel him instead, which Kaiba agrees to.

Yugi defeats Diva, resulting in Bakura's return to reality, and while dueling Kaiba, Yugi re-completes the Millennium Puzzle to demonstrate that the spirit of Atem is no longer inside it. Diva becomes corrupted by the incredible evil powers of the Millennium Ring, and duels both Yugi and Kaiba. Kaiba sacrifices himself during the Duel and makes a final plea for Yugi to call forth Atem. Yugi succeeds in doing so, and he and Atem defeat Diva with ease. Atem and the Millennium Puzzle then fade away, and Kaiba and everyone else return to reality.

The film concludes with Yugi and his best friends, seeing Tea off at the airport as she goes off to pursue her lifelong dream of becoming a professional ballet dancer in New York City. Meanwhile Kaiba uses his technology in conjunction with the Quantum Cube to transport his own consciousness to the Afterlife. He approaches Pharaoh Atem, sitting on his throne, who responds with a confident smile.