This week's Icarus and Daedalus presents…

Despite Yuji being right about where Rammie is, Margery arrives before he and Shana do. Rammie wonders if he will have to use 'that spell', but realizes he won't have to. Instead he casts another illusion spell, to conceal the entrance of Shana and Yuji. Shana briefly explains why she is protecting Rammie, but as expected Margery doesn't care.
The battle ensues, and Margery attempts the trick she used against Shana last time - that is, use illusions of herself to surround Shana. However, this doesn't faze Shana, and she easily picks out Margery. Since Shana appears to have the upper hand, Margery decides to try a under-handed attack against Yuji. However, Yuji is prepared: he uses Azur to form a shield that protects him and Rammie from Margery's magical blast. Shana uses Margery's surprise at a failed attack to slash her bear form in two. Back in human form, Margery is shown defeated.

Good Shana, you look kind of gar.
Our protagonists' moment of triumph does not last long, however, as Margery's previous spell goes out of control and destroys the entire area. Margery and Yuji are left desperately grabbing onto ledges in order to avoid falling into the pit formed by the destruction. Yuji loses his grip, and after Rammie fails to grab his hand in time, Shana jumps down to save him. This leaves Yuji hanging off of Shana, the latter who has her sword stuck in the wall to prevent their fall. Rammie takes this opportunity to bail, but Margery immediately changes back to her bear form and gives chase.
Meanwhile Shana, under her 'I can do anything!' mentality, tells Yuji to drop the shield as she loosens her sword from the wall. As they fall, she …sprouts wings from her back.

Definitely a wtf moment for me.
Unaccustomed to her new ability, Shana tells Yuji to grab tighter as she stabilizes herself. Right when Margery is about to launch an attack on Rammie, appears and in one fell swoop cuts her in half. (Again.) Margery falls down through the debris, and has a flashback to when she became a Flame Haze. The scene involves a lot of blood, a knight in full armor, and Marcosius telling Margery to call his name.
At that instant, the area behind Shana and co bursts apart with magical energy, and a quick-thinking Shana airlifts everyone to safety. The massive amount of energy somewhat materializes into the shape of a dragon, which Rammie identifies as Fang of Devastation Marcosius' flame of illusion. Some explanation.

Lol, wut?

Well, obviously.
Rammie says that if Margery and Marcosius stay out of control, the Fuzetsu will be unlocked and any environmental damage done will be irreversible. Oh, that and everyone inside the Fuzetsu will die. Shana says that she'll attack the flame of illusion directly, and Yuji asks if he can help. After a pause, she says yes, he'll need to use Azur to create a small shield at the moment she asks. She tells Yuji to grab onto her, but since he's taller than her, she pushes him down towards her chest so that she can see.

Isn't this…? He subsequently gets punched on the head.
Shana takes to the air with Yuji, and after dodging a few magical energy balls, she asks for Yuji's shield. He complies, shielding them from a larger one, and immediately after Shana plunges both of them into the mass of energy. They reach the core to see Margery curled up in a fetal position, whom Shana slashes. (Wut?)
After being defeated (finally), Margery is shown covered with only a blanket. She resigns to listen to Shana's reasoning, and also gets a warning not to chase Rammie anymore. Rammie then tells Margery to give up chasing 'Silver', which is the alias of the Tomogara that destroyed everything important to Margery. Alastor asks Rammie about 'Silver's' identity, but Rammie is unable to respond. The topic then turns to rebuilding the destruction caused by the battle. When Yuji offers to use his existence, Rammie correctly guesses that he has the Reiji Maigo. However, Rammie says that even Yuji would not have enough to fix something of this magnitude.

Aw, Reiji Maigo doesn't restore deficit? :(
The next morning Shana, Yuji, and Alastor say farewell to Rammie. Yuji thanks Rammie for fixing the city. It is also revealed that Rammie is the Spiral Organ, who is apparently the best spellcaster in all of Guze.
Meanwhile, Margery is still contemplating her loss. She says how she feels so alone, but Marcosius points out that she still has someplace to go back to, and she looks down to see Satou and Tanaka. Tears are shown shimmering down Margery's cheeks.
As Shana and Yuji head to school together the next day, Yoshida spots them from afar. This fact, coupled by the realization that they both missed school the previous day, makes for a very worried Yoshida.

Is this some setup for the next episode?

Thoughts:
This episode really highlights the benefits of positive thinking. Because Shana believes in herself and Yuji, she's able to triumph rather effortlessly against Margery. On the other hand, Margery's defeat seems to be forcing her to re-think her position. More mysteries are brought forth, such as the identity of 'Silver', and a stage for drama is set via Yoshida.