The Loax, who were the gang Iolaus was once part of, break into the academy to steal the tuition money while the cadets have a party at Kora's inn. Unfortunately, Iolaus, Fiducius and Lilith are still inside. They become hostages. Hercules breaks in and rescues Lilith and Fiducius. Iolaus will have to wait since he's in the training room, which the gang has too well-guarded.
With the help of Jason and the rest of the cadets, Hercules storms the academy. The cadets rescue their tuition money and defeat the Loax. Cradus, the Loax's leader, tries to escape by telling Iolaus that he owes him for covering for him when they were caught after a robbery heist. Iolaus justly decides that he doesn’t owe his former boss anything but a chance to pay for his mistakes.
Starring: Ryan Gosling (Hercules), Dean O'Gorman (Iolaus), Chris Conrad (Jason)
Guest Starring: Jodie Rimmer (Lilith), Ross Duncan (Fiducius), Toi Iti (Cradus), Marek Sumich (Neolun), Benjamin Crellin (Nezzas), Jason Lees (Eager Cadet)
Written by Jim Fisher & Jim Staahl
Directed by Charlie Haskell
Trivia: Toi Iti takes over the role of Cradus that Marek Sumich portrayed in the pilot movie. Ironically, Sumich appears in this episode as another member of the Loax.