Elaine "Ellie" Harrison has just moved from Minnesota to Annapolis, Maryland while her parents take a year long sabbatical to continue their medieval studies in nearby DC. Her new high school,
Avalon High, seems like a typical high school with the stereotypical students: Lance the jock, Jennifer the cheerleader, Marco, the bad boy/desperado, and Will, the senior class president,
quarterback, the man every girl wants and all around good guy. But not everyone at Avalon High is who they appear to be, not even Ellie herself.
Eventually, it becomes apparent that Avalon High is a situation where the ancient Arthurian legend is repeating itself. Will, Jennifer, Lance, Marco, and Mr. Morton all correspond to King Arthur, Queen Guinevere, Knight Lancelot, Mordred, and Merlin, respectively. As for Ellie, Mr. Morton and Marco misinterpret her as Elaine, the Lady of Shalott, who, in the legend, falls in love with Lancelot yet commits suicides due to her spurned love.
Ellie finds out that according to common gossip, Will's father, Admiral Wagner sent his best friend, Marco's father, to a dangerous area which resulted in his death and six months later, married his best friend's wife. While relations between Marco and Will were strained, Will believed that Marco was "starting to chill."
Ellie finds out at a party at Will's house that Jennifer and Lance had been seeing each other behind Will's back for months without his knowledge. It also becomes apparent that Marco knew about the relationship and wanted Will to find out. Will eventually finds out about the relationship and says that he is relieved about it.
Ellie mentions to Mr. Morton that Will and Jennifer had broken up and Jennifer was now seeing Lance, which elicited an odd response from him. He mutters that it was "too late, it had started so soon". he tells Ellie that her part in it had ended before it had even begun.
A confused Ellie calls her mother and asks her about the story of King Arthur and finds out some startling connections like the name of Arthur's dog and his boat. She finds out that Will's name is actually Arthur William Wagner. She confronts Mr. Morton about it who tells her Will will eventually die.
Mr. Morton is struck with guilt for abandoning Arthur at his time of need and sets up a meeting between Will's stepmother and Will himself where it is revealed to Will and Marco that Jean, Marco's mother was actually Will's mother as well and had given birth to Will when her husband was stationed overseas and had given Will to his father to look after.
During a storm apparently brought about by the "forces of darkness" Ellie finds Will. Marco who had broken into Admiral Wagner's gun case and taken a gun from it also finds them and threatens to kill Will and Ellie. At the last moment Ellie hands Will a sword. When Will takes it, everything changes. The black clouds roll away, everything seemed brighter. Marco eventually drops the gun down and is arrested by the police that Mr. Morton brings. Mr. Morton realizes that Ellie was not the Lady of Shalott as they had assumed but was the Lady of the Lake, the character who gave Arthur the weapon that he used to defend the realm, who kept his friendship with Lancelot and Guinevere from splintering and who brought him home to Avalon.
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