Humanity finds itself in a struggle when the sea level begins to rise to an unprecedented level in the year 2039. To make matters worse, powerful enemies resembling old wartime vessels called the Fleet of Fog roam the waters, severing communication and transit to various regions. Any attempt at retaliation ends in failure with humanity's current weaponry. Only Gunzou Chihaya stands a chance against the Fleet of Fog as captain of the friendly Fog I-401 submarine Iona. As a result, Gunzou and his crew, known as Blue Steel, are tasked with a critical delivery mission by the Japanese government: they must deliver humanity's last hope against the Fleet of Fog, the Vibration Torpedo Warhead, through hostile waters to the United States for mass production. Though involved in the unsavory conflict, Blue Steel strives for nothing more than a peaceful resolution to it. As Iona undertakes the current mission and tasks beyond it, the crew upholds their values even in the face of harsh situations.

When a sudden thunderstorm strikes, Mei, a young goat, has no choice but to take shelter in an abandoned barn. Before long, he is joined by another animal—a wolf named Gabu. The night is pitch black, and neither of them can make out the other's appearance, but they become fast friends as they chat for hours, promising to meet again. As soon as Mei and Gabu reunite in daylight, they are met with a predicament: they would normally regard each other as mere predator and prey. However, they vow to remain friends nonetheless and start meeting in secret. While their friendship deepens, their families find out about it, forcing both Mei and Gabu to wonder if their relationship is truly worth the risk.

The group of privateers known as the Blue Steel continues their mission to deliver blueprints of the Vibration Warhead Torpedo—a weapon that may turn the tides of war in their favor—to the United States. However, a new threat arises from their enemy, the overwhelming Fleet of Fog in the form of The Student Council., This is a group of warships composed of the remaining Mental Models—the ships' humanoid avatars—who have yet to face the unpredictable captain of the Blue Steel, Gunzou Chihaya. As the Blue Steel gets closer to understanding the origins of the authority controlling the enemy, Iona's past starts to reveal why the war began and her reason for siding with humanity.

This movie is an alternative version of the TV series; it is composed of the two 2007 OVAs, edited to improve the pacing of the plot, and an extra segment akin to a TV episode where the cast are given the task of studying flowers. The plot has several differences to the TV series.