June proposes a contest to determine the leader of the Challengers. She gives them each a gift to help them get the Gargoyle. Ace uses his hour-glass to escape from a robot pterodactyl and parachute into the castle. Underwater, Ace uses the ink of his pen to blind a minisub, but needs Ace to rescue him. Red rappels down the mountain and uses his key to grind the gears of a giant robot hand, but he's knocked out and Ace rescues him too. Rocky uses his balloon as a slingshot against a gorilla, but he too needs Ace's help. June crowns Ace the leader because he used his gift and saved the others.; On the rooftops, the Gargoyle broods. The Challengers rush him, as he's wanted for burglaries, but the Gargoyle escapes. He lands next to a blind woman, Laura, and an odd friendship begins. The Gargoyle needs a gang, so he snatches some prisoners, leaving two police officers in peril who the Challs must rescue. Later, after the Gargoyle promises to pay for Laura's eye operation, the Challs find him again, but again he escapes. When Laura's bandages come off, she is horrified at her evil benefactor, who tries to toss her off the hospital. The Challs save her, but the Gargoyle gets away for now.