The saga begins with a scene of some Red Ribbon soldiers searching for a Dragon Ball that is currently inside a volcano in the Sacred Land of Korin. The volcano explodes and sends the Dragon Ball (the Four-Star ball) into the camp of the land's protectors. Living here is Upa and his father Bora.
The Red Ribbon Army follows the ball into the camp and demands it be handed over. Upa's father proceeds to eliminate them and the last remaining soldier (Captain Yellow) radios back to the Headquarters. Commander Red hollers at him and he comes back. In desperation, he abducts Upa as a ransom for the ball, but he does not count on Goku showing up. Goku beats him and rescues Upa. As a token of thanks, Goku is given the Four-Star ball, his Grandpa Gohan's Dragon Ball.
At the same time, General Blue is returning to the Red Ribbon Army Headquarters, while Commander Red is in the process of hiring Mercenary Tao. General Blue walks in on them and seeing him Dragon Ball-less, Red makes him fight Mercenary Tao to redeem himself (and see if it is really Mercenary Tao, not some imposter). The fight is quick, with none of Blue's attacks having any effect, even his paralyzing technique. It ends with Tao using his tongue to strike Blue's temple and kill him. Satisfied, Commander Red hires him to kill Goku and retrieve the Dragon Balls. Mercenary Tao then cuts out a piece of a column and uses it as a ride to the Land of Korin.
When Mercenary Tao arrives, Upa's father jumps in to protect Goku but is killed by Mercenary Tao with his own spear. Angry, Goku challenges Mercenary Tao and gets slapped around for a while. He tries his Kamehameha, but all it does is destroy Mercenary Tao's clothes. Mercenary Tao retaliates with his Dodon Ray, which knocks Goku out, yet Mercenary Tao thinks he killed him (the four-star ball Goku got earlier was in his shirt and absorbed most of the blast). Mercenary Tao takes the other balls and leaves to get a new robe.
When Mercenary Tao arrives at a tailor, he gives the man three days to make a new robe or Mercenary Tao will kill him. He then checks into a hotel and calls the Red Ribbon Headquarters. Red informs him of the missing ball and Mercenary Tao tells him he will get it back in three days (when his new robe is done).
Back in the Land of Korin, Goku awakes before Upa buries him. During their talk, Goku learns of the legend of the Korin Tower. The legend is that anyone who can climb to the top will be given sacred water that will greatly increase their power. This is perfect for Goku, who needs the strength to defeat Mercenary Tao. Goku vows to use the Dragon Balls to bring Upa's father back to life and begins his ascent up the Tower.
He reaches the top after a very long climb and meets Korin, who turns out to be a short, fat, talking cat. Before Goku can explain his situation, Korin reads his mind and understands why Goku is after the water. He will give Goku the water on one condition: that Goku get it from Korin. Goku tries to retrieve the water, but Korin is too fast for him and dodges him easily. Feeling defeated, Goku is told that Master Roshi was the last one to get the water from Korin, over three hundred years ago. Not only that, but it took Master Roshi three years to do it.
The two of them retire for the night and we see a Senzu Bean for the first time when Korin gives one to Goku to restore his energy. He then throws Goku's four-star ball out of the tower and Goku jumps out after it. He gets to the bottom and retrieves the ball, then climbs all the way back up the tower again, in much quicker time.
The next day, Goku once again fails in retrieving the water, even after getting Korin's advice. It is on the third day that Goku gets the water, only when it fell off of Korin's staff and nearly to the ground. Goku dove out and caught it, using his tail to keep from falling. He drinks the water and finds out that it is just tap water and the power comes from the training. Satisfied, Goku thanks Korin and leaves.
Tao finally gets his new robe and comes back to finish off the job, only this time it is Goku who is beating Mercenary Tao. He tries his trump card, the Dodon Ray, but Goku is able to block it. Boasting, Goku tells Mercenary Tao of his strength from Korin Tower and Mercenary Tao immediately rushes up the tower to get the power for himself. He reaches the top and gets the water. Korin manages to fool him with some magic and Mercenary Tao returns to finish the fight, thinking himself stronger now.
When he gets back, he is giving Goku all he has got and appears to be winning. That is, until Goku shows him that he was not being serious. Goku then proceeds to beat up Mercenary Tao, who fakes a surrender to trick Goku. During this fake surrender, he tosses a grenade at Goku and hops up to avoid the blast. Goku is not fooled and he kicks the grenade up to Mercenary Tao, where it explodes and presumably kills him (however he is later shown to be alive). Gathering up the rest of the Dragon Balls, Goku now heads to Red Ribbon Headquarters to get the other two balls.
Goku vs. The Red Ribbon Army
We then see a short segment with Colonel Violet, the only female high-ranking officer in the Red Ribbon Army. She retrieves a ball for a reward and that is about it. During this, Bulma builds a flying camera to follow Goku, when she learns that he is going straight after the Red Ribbon Army. Worried about him, Bulma makes a phone from Turtle's advice and calls Yamcha, Puar, and Oolong. Yamcha arrives by plane and takes the rest of the crew to save Goku. However, Bulma is still mad at Yamcha for what happened earlier with Hasky.
Goku meanwhile is passing right by the Red Ribbon Army's security system, because they think he is Mercenary Tao coming back. By the time they figure out it is him, it is too late. Goku hops off his Flying Nimbus and rips the Red Ribbon Army apart with ease. He fights his way to Commander Red, who leaves his assistant to fight Goku. During their fight however, Commander Red drops the ceiling on both of them. Thinking them dead, Commander Red reveals his ultimate wish for the Dragon Balls: to become taller. Staff Officer Black (who was not killed by the ceiling) comes back and kills Commander Red, angry over being fooled. The still-alive Goku also appears and defeats Staff Officer Black, who even after using a special robot suit could not win.
Goku collects the two Dragon Balls and starts to leave when Bulma and crew show up. They are amazed at his ability and happy he is safe. The problem though is that the Dragon Radar is not picking up the last Dragon Ball. The gang then return to Kame House, where Bulma would hopefully fix it.