The film opens with a small digital montage showing light cycles and other vehicles racing around a digital world. In the background, an older Kevin Flynn explains how the world was created.
The scene then changes to the real world, zooming past buildings and to a small neighborhood, where a younger Kevin Flynn is talking with his son about the world of Tron. Figures, light cycles and a poster are shown from this virtual universe. Upon concluding his story, Flynn explains he needs to go back to the office to do some work. His son, Sam, wants to come along, but Flynn relents and says one day he'll take him into the grid. He promises to take him to the arcade and flips him a quarter. His son asks if they can play together, and Flynn says, "We're always on the same team." and leaves. He hops on his motorcycle and rides away.
The scene changes to a news report indicating the disappearance of Flynn. It explains how he left behind a huge empire at ENCOM and how Sam has been orphaned. Upset, he runs away from his grandparents, hops on a bike, and rides after him...
The scene changes to years later. Sam, now all grown up, is racing down a city street on a motorcycle. A cop picks up pursuit when he's speeding, but he easily evades them. He pulls up outside an office building, uses an encoder to break into the door, and sneaks in. It's actually ENCOM.
Several board members are talking about the release of a new patch of software. On the team are a young hotshot named Dillinger (Cillian Murphy) and the eldest of the board members, Alan Bradley (Bruce Boxleitner). As they talk about the patch and count down its debut on the Nikkei trade, Sam breaks into the headquarters and begins downloading a file. A security guard catches wind and tries to catch him, but is too late as he runs out of the room. The ENCOM board prepares to launch the patch, which doesn't do anything significantly new for the hardware but will make them money, and all that pops up is a video of Sam's dog. Amidst the chaos (which Dillinger manages to patch up), Sam escapes to the roof, where the security guard has given chase. Sam reveals himself to be Kevin's son, and the guard asks why he would do this. Sam explains that the patch should've been free, and jumps off. He parachutes to the street below, where he rides atop of a cab he landed on and is eventually caught by the police.
Let go with a warning, Sam returns home, where Alan is waiting for him. After briefly talking about his little stunt, he explains that he got a page from his dad's office over at Flynn's Arcade -- from a number disconnected twenty years ago. Sam really doesn't seem to care, but Alan gives him the keys anyway. Sam changes his mind and decides to pay a visit.
Sam heads to the arcade, turns on the lights and the machines, and looks around. Everything is covered in plastic. He goes to a Tron machine at the end of the hall and drops a quarter in. It hits the floor and he notices etchings on the ground. He moves the machine to find a hidden passageway, which he goes down. Inside, he finds a secret office and a computer interface, similar to the one Flynn used in the 80's. While typing commands, he activates a laser behind him, which zaps him and...
Sam ends up in a virtual universe. He flees the office upon hearing rumblings, only to look around and see nothing but neon-lit buildings on the Grid. Above him, a sentinel ship descends, trapping him and taking him into custody. A security guard is assigning detainees to different departments. Sam is assigned to "GAMES". After leaving the ship and watching a scared prisoner derezz himself, Sam is taken down to a digital center, where his outfit is changed and he's given an identity disc. He asks one of the ladies, Gem, what he's supposed to do. She says "Survive" and shuts down.
From there, Sam is transported to a game grid, where he's thrust head first into a Disc Match. A guy tries to tear his head off with a disc before he eventually learns to fight back, as the crowd cheers madly around him. He manages to bust open the floor and subdue the guy, before dropping down into the next level of play. He beats yet another opponent and then decides to escape, all while a strange, orange-cloaked figure watches from a distance. Sam slips down several levels, only to land on the lowest level of them all, where the "boss", a dual-disc wielding menace, awaits. They get into a battle, in which Sam is defeated. He loses a slight bit of blood, and the enemy identifies him as a user. The cloaked figure asks that he be brought up.
Sam arrives in the man's office, only to see a younger version of his father -- Kevin Flynn. He looks over Sam's disc, talks to him briefly, then reveals that he is not his father, that he is in fact the administrator his father created for the program, known as CLU. He's still happy to see him, and soon reveals why -- he wants to make an example of him, just like he did his father.
What follows then is a huge light cycle battle, where CLU and his riders battle Sam and his riders. Sam holds up well as he and the other riders tag team a few of the orange riders and take them down. But eventually, CLU knocks Sam off his cycle and breaks his contrast bar, ready to strike him with his disc. Suddenly, an off-road vehicle intervenes, and the driver insists Sam get in. He jumps in, and the off-road vehicle escapes the arena, going off road into an undisclosed location. The rider reveals herself to be Quorra.
After they arrive at the location, Quorra takes Sam to the real Flynn, where they have a reunion. Flynn seems a little out of it, and soon reconvenes to rest. Quorra explains a little bit behind what Flynn's been doing, and talks about some of her favorite books, which Flynn had been collecting. Meanwhile, CLU, who almost seems like he's been planning this, awaits Flynn's next move.
During a dinner, Flynn explains why he never returned home. It turned out that CLU, who he programmed to help create the perfect world, lost control and turned on both Flynn and Tron. In a scuffle, Tron supposedly perished, while Flynn fled. Soon after, important ISO characters who were supposed to populate this world and help it thrive are massacred by CLU and his army, leaving Flynn trapped. Sam explains that a portal that zapped him through is still open, and he can manage to get both him and his dad home. Flynn refuses, explaining it's too dangerous -- and if that CLU gets a hold of his program disc, he'll be able to zap his way into our world and practically doom it. Angry, Sam retreats to his room.
Quorra checks on Sam a bit later, and explains that someone can help him get back to the portal, a figure named Zeus, who resides in the city. Sam takes his father's old light cycle and races back to the city. Flynn goes to check on him, only to notice he's gone. He decides to go after him, with Quorra in tow.
Meanwhile, CLU identifies the light cycle's "point of origin" and pays Flynn's place a visit with his troop. He discovers Flynn's personal belongings and thinks back to his original creation, only to knock over everything on a table in anger. He then notices their absence and tells his team to move.
Back in the city, Sam runs into Gem again, who states that they can take him to Zeus. They go up to a high-tech dance club, which is run by Castor (Michael Sheen). Castor invites Sam into his private office while having some DJ's (Daft Punk) entertain the guests. He reveals that is in fact Zeus, and used Castor as a cover. He states that he can help get Sam back to the portal, but suddenly CLU's guys bust in, as Castor has set a trap. Sam manages to fight briefly, but soon Quorra busts in to help out. In the scuffle, she loses an arm and goes into shock. Flynn walks in and manages to shut everything down, allowing Sam and Quorra time to escape. In the battle, however, Flynn loses his disc to a soldier, who sets a trap to kill them in the elevator. They manage to escape thanks to Flynn's technical kn0w-how, but Castor now possesses his disc.
Angry at Sam for his disobedience, Flynn agrees to go back to the portal with him. They hitch a ride on a Solar Sailer, and Flynn manages to repair Quorra's broken arm. During their discussion, Flynn tells Sam of Quorra's importance -- she's actually the last remaining Iso, one that CLU failed to kill. She must stay alive, no matter what the cost.
Meanwhile, back at the club, CLU makes a trade for Flynn's disc, giving Castor power in return. However, he turns on him, setting explosives and killing both him and Gem, while saying "End of line, man!" He then proceeds with his right hand man, the dual-disc wielding psycho, who has managed to track footprints from Flynn and company.
Atop the Solar Sailer, Quorra awakens, and she and Sam have a discussion about the real world as Flynn meditates. He explains what the sun is, and Quorra is mesmerized by the thought of actually seeing it. What they don't notice, however, is one of CLU's sentinel ships pursuing the Sailer.
The Sailer takes an alternate route into one of CLU's processing plants. Here, the trio learn of CLU's plans, as he attempts to lead an army into the real world, using the access details from Flynn's disc. Quorra decides to sacrifice herself in order to get them closer to the disc. She is captured by the dual-disc man, who Flynn recognizes by the colors on his disc -- it's actually Tron! As she's led away, CLU speaks to his highly emassed troops about the new world that they can discover. Flynn and Sam split up, though reluctantly, but Sam states that, like he was told as a kid, they're on the "same team".
Flynn secures a ship (in a hilarious sequence involving a soldier being "reprogrammed" with a slap to the head) while Sam manages to fight off CLU's soldiers and steal back the disc. He also manages to secure Quorra after battling the evil Tron, and the two make their way to Flynn's ship and escape. CLU, finding out that the disc has been stolen, kills his right hand man and pursues in a light jet, with others, including Tron, in tow.
What follows is a wild aerial sequence, with Sam shooting down jets with a neon turret and Quorra doing some fancy flying. All but CLU and Tron manage to be destroyed. CLU is about to destroy the jet when Tron, recognizing Flynn on the jet, turns and says, "I fight for the users!", sacrificing himself to stop CLU by crashing into his jet. As they fly away, Flynn asks Quorra for a favor.
CLU isn't dead though. He grabs Tron's flight bar and reforms the jet, soon taking back after Flynn's jet. Tron drowns in the waters below, converted back to his old self.
The jet makes its way to the portal. Flynn, Quorra, and Sam get out, only to have CLU waiting for them. Sam tries to fight CLU off, but is shrugged aside. Quorra slips past CLU, leaving him to face off against Flynn. Flynn apologies to him for breaking his promise of a perfect world, but CLU, unwavered, grabs his disc. It's not his, however. It's Quorra's. Quorra managed to swap discs with Flynn in the jet, and she and Sam make their way to the portal. Sam doesn't want to leave without his father, but Flynn is insisting they leave. As Sam holds up the disc to activate the portal, CLU tries to stop them, but Flynn sucks him in towards himself, merging them together and destroying them. Shocked, Sam manages to transport into the portal, and...
BOOM. Sam is back in the arcade. With the data of the Grid stored onto a microchip hung around his neck, he returns to the main floor of the arcade, where Allen is waiting. He tells Allen that he's retaining control of the company, after spending so much time free-wheeling and goofing off. Allen seems happy about it. Sam leaves, with the arcade lights still turned on. Looks like it's back in business.
Meanwhile, waiting outside the arcade is Quorra, who asks Sam what they're going to do now. They hop on a bike and ride, and as they head into the city, the sun comes up on the horizon. Quorra shows a big smile on her face and holds herself close to Sam.
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