Capital of Illusion (幻の都) is the tenth episode of .hack//Legend of the Twilight.
The Episode starts off in a hospital where 2 doctors are discussing how all their patients fell into comas while playing the same game. We then hear an executive from CC Corp telling Reki that he is in charge now that Magi is in a coma. After revealing that they intend on reporting to the media that the true cause of the incident was no more than a prank, Reki asks about the Wandering AI. The executive approves the usage of system management clause 318.
At their hideout Shugo's Group is discussing the news about the incident with CC Corp claiming they are not responsible & then start talking about the rumors & theorys on the message boards only for Ouka to comment that they have too much freetime. Reki then is shown lamenting over his promotion & after accidentally walking into a female PC's breasts is slapped in the face. Sanjuro then comments that The World is easier than reality & asks Reki what he is planning. Reki reveals that he isn't qualified enough to become system administrator & has no desire to pursue the job.
Back at the hideout Shugo exclaims that he wants to go find Rena, however Ouka comments that the AI can destroy entire areas & that they should be careful not to end up like the Cobalt Knights. Sanjuro then arrives & says they should be level headed. After Hotaru asks, Sanjuro explains that a wandering ai is unused NPC data that learns it's own conciousness. Shugo then comments that they saw Rena, & says that as long as he has the bracelet they can do anything, only for Sanjuro to reply that only Shugo can use it. Sanjuro then suggests that they think things through & decide their path tomorrow.
Rena realizes that Shugo must have came searching for her & decides not to give up. The next morning Shugo is met by his party members who all have decided to go with him. After Balmung loses at Shogi, Reki asks why he logged into The World to play Shogi alone. Balmung then replys that he's a regular player & asks Reki why he came there. Reki then says it may have been to make fun of him, then admits it was a lie & asks Balmung about his past, saying it must have been amazing to fight side by side with Kite, although it may be better sulking all alone in the woods. Reki then asks if Balmung was just a regular player during the 1st Twilight & gives him a master key card.
Shugo's party arrives at the Root Town Naval Monte, where Occa comments that they won't have to waste time Gate Hacking to get into each dungeon & Sanjuro states the area with the Wandering AI is connected to Naval Monte. They comment on how it doesn't feel right that there are no people there & Sanjuro claims it would be best to assume that common sense no longer applys before a monster appears in front of them.
Rena then comments that the only landmark to where she is seems to be the dungeon's entrance & guesses that the area must still be under construction. When she decides to give up, Rena sees Morti & mistakes her for Aura initially, then asks who she is & where they were. Morti tells her that in order to transcend death it is important for her to understand it & that she had been thinking about death for a while.
After Shugo's Datadrain fails against the monster they are fighting, he is saved by Lord Balmung who then reveals that to defeat it they will need to work as a team. After the monster is successfully datadrained Morti leaves Rena & the episode ends with the Wandering AI appearing before Shugo's Party & revealing her name to them.