Sam is captured and taken to the game arena, where he is pitted against Rinzler, the champion of the games. During their duel, Rinzler notices that Sam is not a Program but rather a User. Rinzler takes Sam before CLU, a digital copy of Kevin Flynn, who rules over the Grid. CLU nearly kills Sam in a Light Cycle match before Quorra (Olivia Wilde) rescues him. Taken to a distant, off-grid hideout in the "Outlands," Sam is reunited with his father.
Flynn explains that he had been working on a new, "perfect" system and had appointed CLU and Tron, a digital copy of Alan Bradley from the first film, as its co-creators. After much work, Flynn discovered a new series of sentient "isomorphic algorithms" (ISOs), self-produced Programs that spontaneously evolved in the system, which carried the potential to unlock mysteries in science, religion, and medicine. CLU considered these Programs to be an imperfection so he betrayed Flynn, defeated Tron (who sacrificed himself to give Kevin enough time to escape) and purged the ISOs in a genocide. Flynn also revealed that while he hid from CLU, the portal back to the real world had closed, making him captive of his own creation until Sam re-opened it from the outside.
Resolving to make it back to the real world where he would be able to delete CLU, Sam makes his way back onto The Grid to find a Program named Zuse, who he believes can provide safe passage to the portal. The End of Line Club owner, Castor (Michael Sheen), reveals himself to be Zuse and, instead of helping Sam, betrays him to CLU's guards. Though Flynn and Quorra arrive just in time to help Sam escape, Quorra is grievously wounded and Zuse gains possession of Flynn's identity disc. Knowing the disc works as a master key to The Grid, Zuse attempts to use it to bargain with CLU, but CLU simply takes it and destroys the club. Flynn and Sam save the injured Quorra and stow away aboard a freighter heading towards the portal. While Flynn heals Quorra, he reveals her to be the last surviving ISO.
The three unexpectedly arrive at a station aboard a massive warship and encounter Rinzler. As Quorra attempts to distract him, Flynn recognizes Rinzler as a reprogrammed Tron. Elsewhere on the ship, CLU addresses his army, expressing his desire to enter the real world and "perfect" it. Sam saves Quorra from Rinzler and reclaims Flynn's disc. The trio then commandeer an aerial shuttle and escape, but CLU, Rinzler and several guards pursue them in Light Jets. Between Quorra's evasive flying and Sam manning the rear turret, the three manage to shoot down the guards. As Rinzler moves to destroy the shuttle, he makes eye contact with Flynn and his original identity as Tron suddenly resurfaces. Declaring, "I fight for the Users," Tron deliberately collides with CLU's Light Jet, destroying both vehicles. As the two fall, CLU wrestles away Tron's spare baton, creates another Light Jet, and continues to the portal. Tron falls into the Sea of Simulation, where his armor reverts to its original blue.
Sam, Flynn and Quorra finally reach the portal, only to find CLU blocking their path. After attempting to reason with CLU, Flynn sacrifices himself to end the impasse, pulling CLU toward him and causing the two to merge, while Sam and Quorra use Flynn's disc to travel through the portal back to the real world. Flynn and CLU's merge causes a massive explosion that destroys them both, as well as CLU's army and his warship.
Back in the basement of Flynn's arcade, Sam backs up the system onto his flash drive and powers it off, holding the Grid's data on a computer chip around his neck. He then meets Alan and tells him that he will start working at Encom, and, as the controlling interest shareholder, he will name Alan chairman of the board. Quorra meets Sam outside, and the two take off on his motorcycle. The movie ends with Sam showing Quorra the sunrise she has longed to see.
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