NOTE: This is where Kaiju Big Battel comes into play, despite said franchise not being a part of Team Arch.
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Team Arch is informed by Vanguard Inc CEO Chad Perkins that a Vanguard scientist, Dexter Ferguson, has gone rogue and plans to bust Samson Kaylock out of prison. As Kaylock is transferred between prisons alongside fellow convicts Cesar, Vaughn, and Stowman, by two corrections officers and Central Intelligence Officer Preston Thornton, Kaylock's attack their convoy. Despite Team Arch's interference, Kaylock escapes when Ferguson uses a teleportation device, but Kaylock is hijacked mid-teleport, winds up in another dimension, and meets a maniacal German scientist named Dr. Cube, who reveals his plans to invade San Francisco with his monsters: Gomi-Mon, Devil Monkey, Grudyin, Marutambo, and Napalean, his biggest monster who is currently frozen after an unfortunate event. He gives Kaylock a special compound in exchange for finding three components of the Hyper Core, a machine that powers his warship, the Super Dimensional Slug (SDS-1), which will open a portal to his hideout when united, as Kaylock and Ferguson have the first piece. Preston returns to the CIA California office, where he meets up with coworkers Travis and Yancy Dalton, Sally Moon, and Austin MacGyver, the younger cousin of SpongeBob's previous ally, Angus MacGyver II.
Now reunited with his army, Kaylock recruits Cesar, Vaughn, and Stowman, all of whom are given super strength after injecting themselves with the compound. Kaz witnesses their transformation and steals the remaining vial. Pursued by Kaylock's men, he is rescued by Austin's team, who later meets the rest of Team Arch, but the vial is taken into police custody. At the CIA office, Travis deduces that the compound could fall into the wrong hands easily if placed in a simple evidence locker. Austin's team then teams up with Team Arch to break into the SFPD headquarters and retrieve the compound and put it in a more secure locker, but Kaylock's men arrive ahead of them. In the ensuing battle, SpongeBob's existence is revealed to the police, who start a manhunt for him, and Austin's team, except for Austin himself, is arrested while helping Team Arch escape with the compound.
After recovering the second component of the machine (which located at the San Francisco Historical Society), Cesar, Vaughn, and Stowman go to the rainforests of Mystic Mountain, Jamaica, for the final component. Team Arch follows them and board their jet in midair. In the resulting battle, the jet is critically damaged after Stowman fires a tank-mounted Mark 19 grenade launcher, and crashes into a river, though the three powerhouses are ultimately able to escape with the component. Kaylock and Ferguson complete the device and open a portal to Cube's hideout through which SDS-1 begins to emerge. Kaylock betrays Ferguson and his men take him to their headquarters in London. When entering SDS-1, Cube likewise betrays Kaylock, freezing him and locking him with his collection of other defeated foes.
Unable to reach SDS-1 as the police pursue them, Team Arch debates over whether to fight openly or get to SDS-1 in secret. Not wanting to get Austin's Team into more trouble, SpongeBob decides that they fight openly. Upon Preston's request, Austin recovers the security footage from a hidden office camera that proves Ferguson and Kaylock's collaboration and secures his team's release. Austin arranges a meeting between Team Arch and SFPD and convinces the police that they are not enemies and that they're the ones responsible for stopping the Rot Warriors and Elton Sutter from contaminating San Francisco. With the help of the police, SpongeBob, Tai, Sakura, Yugi, and Nate able to jump from Salesforce Tower and confront Cube aboard the still-assembling SDS-1. Austin, Kaz, Hanayo, Gingka, Chase, Preston, Sally, Travis, and Yancy raid Kaylock's temporary facility, defeat the three powerhouses, and take control of the device. As they take control and prepare to shut the portal down, Cube is defeated when SpongeBob short circuits his battle mech, and at Yugi's signal, the two teams hurl SDS-1's beacon back through the portal, taking Cube, his monsters and the rest of SDS-1 with it.
Although Stowman escapes, Cesar and Vaughn are back in custody, while Kaylock and Ferguson remain at large. The teams are honored by the SFPD. The police chief offers them a special lair in Japantown, which they accept and move into. The movie ends with SpongeBob and Austin taking one good look outside their home away from home.
