On an island that will make the perfect outpost, the dragon riders discover its indigenous residents are a mysterious new breed of dragon. 
- Chicken is introduced.
- The Dragon Riders discover Outpost Island and make it their base.
- The Night Terrors make their first appearance, and become the sentries.
- The base camp is named the Dragon's Edge.
The gang starts looking for an island of their own to make their base when exploring the maps of the Original Dragon Eye. The island must be "safe, secure, inhabitable for both [the riders] and the dragons." They find many, but are either full of stampeding wild boar, poisonous Blue Oleanders, or Whispering Deaths. They finally find a fitting island and decide to make camp for the night there, although Tuffnut has his doubts and feels that there is something wrong with the new base.
However, the problem of how the base should be built arises: Snotlout wants it in the shape of an "S" while Astrid wants it to be functional and operational. Fishlegs wants the island to be a place of rest, relaxation and replenishing, even making a rock and stick model on a shield showing a mud bath and hot tub. The twins insist that they build a boar pit. Although many ideas are pitched, Hiccup first pushes them aside for later and directs the group to set up camp.
Later at night around the campfire, Tuffnut scares the group with the possibility of giant creatures out in the forest of the island. When the others are asleep, Tuffnut is startled and awakened, and ventures into the forest to find the sound. A creature seems to be lurking in the trees, but it turns out to be a chicken. Afterwards, a massive dragon appears to rise out of the forest. Tuffnut rushes back to camp yelling for help and wakes the others, warning them to leave. However, the group thinks he is joking and trying to scare them, though Ruffnut states that she usually never sees him this spooked out. So, the gang decides to go check out the dragon. When they arrive at the scene, the dragon is gone and only the chicken remains. The others leave and go back to camp.
The next morning, the group once again start up their conflict over the design of the base. Hiccup suggests that each of the riders come up with their own design and in the end they vote for the best one. Meanwhile, Tuffnut, with the chicken still following him, is still out in the forest looking for the mysterious dragon. He falls off many cliffs in the process.
Back at camp, Hiccup is glad that there is finally peace and quiet while the other riders work on their designs. However, he speaks too soon as Fishlegs and Snotlout begin fighting. Ruffnut asks for Hiccup to be the boar for the "test run" of the boar pit, and Hiccup groans disgustedly. Suddently, Tuffnut appears back at camp, after looking for the dragon all day. Hiccup begins to think that Tuffnut may be telling the truth as he was out for so long. Yet, Ruffnut is the one who begins doubting her brother, which leads them to start a "Thorston Challenge." As the twins start on their search, Hiccup decides to follow them in order to escape the fighting Fishlegs, Snotlout, and Astrid.
It is later revealed that the "Thorston Challenge" was a bet on finding the dragon between the twins. Night falls and they still have not found it, so Ruffnut insists that she is the Thorston Challenge Winner. As Hiccup makes this declaration, they finally encounter the dragon, therefore making Tuffnut the winner the Thorston Challenge. The three begin chasing the dragon as it is headed for camp. The twins and Barf and Belch fly through the dragon, revealing that it is just a lot of smaller dragons flying in the shape of a colossal dragon. The leader of the dragons appears to make the eye of the large dragon, and it is white and larger than the others. The twins capture the leader in a net and bring it back to camp.
Everyone gathers around the dragon, and they notice that the species bear some resemblance to Terrible Terrors and are nocturnal, thus naming the species "Night Terrors," though Tuffnut suggests to call them "Smidvarg and the Gang." Smidvarg, the white Night Terror leader, appears agitated, so the riders decide to check on the other Night Terrors.
The group finds Changewings tormenting the Night Terrors, so they attack and chase the Changewings. However, more come back, so they realize the Night Terrors need their leader to defend themselves. Hiccup goes back and releases Smidvarg. The Night Terrors return into their formation and scare the Changewings away.
In the morning, Hiccup draws up his own plan of the outpost, and combines the ideas of all the riders, deciding to call it "Dragon's Edge." The others agree. Astrid builds the most heavily armed hut, Fishlegs is given a quiet and secluded area overlooking the ocean, and Snotlout is given an area where he can go "S crazy." The twins have a boar pit under their own hut. They plan to connect all the different sections with bridges, zip-lines, and gangplanks, and build stables with landing strips with a dragon training arena. In the center is the clubhouse, the "eye" of Dragon's Edge. In addition, they build perches for the Night Terrors to stand on, as they decide to share the island with them, with the benefit of knowing that they seem to have an instinct to protect.
Hiccup brings back the topic of the Thorston Challenge, and the apparent punishment for losing is Ruffnut swapping clothes with Tuffnut, and if Tuffnut had lost, he would have had to swap clothes with her. The Night Terrors make a formation of a Night Fury, probably expressing their gratitude and friendship with the newcomers.
- This is the first episode to feature Chicken.
- This is the first episode that mentions Ruffnut and Tuffnut's family name, Thorston.
- Tuffnut repeats a line from How to Train Your Dragon. "Oh, I am hurt! I am very much hurt."
- It is hinted Snotlout is afraid of snakes.
- Jay Baruchel as Hiccup Horrendous Haddock III
- America Ferrera as Astrid Hofferson
- Christopher Mintz-Plasse as Fishlegs Ingerman
- Andree Vermeulen as Ruffnut Thorston
- T.J. Miller as Tuffnut Thorston
- Zack Pearlman as Snotlout Jorgenson