At the villa is a shrine, which Tsuruya's "crazy grandad" built. Haruhi is enthused since, unlike a more public shrine, there was no crowding.
The Brigade goes skiing and flying a kite with the unmodified SOS Brigade logo, printed with the help of the Computer Research Society. The string breaks, and they follow the free-flying kite to the base of a mountain, where they encounter a wolf. Kyon thinks it might be intelligent. It gets them to follow it to a hidden, abandoned shrine. The Brigade finds the kite there, along with a pup with a wounded leg. Kyon finds this "too convenient".
They bring the pup back to the villa. Itsuki Koizumi, noticing something unusual about the wolf, apologizes to Kyon for not being fast enough to stop Haruhi from printing that banner. At the villa, Arakawa treats the wolf pup. He claimed it was shot by a hunting rifle. The mother returns, and the pup leaves with it.
Koizumi discovers the wolf is actually an extinct Japanese wolf, and notes there weren't any hunters around to explain the injury. Both shrines had an unusual mark on them. When Kyon asks Tsuruya about it, she says the shrine had been moved, despite opposition. She seems not to know about the hidden shrine.
Koizumi hypothesizes that creatures such as the extinct passenger pigeons (in "The Sigh of Haruhi Suzumiya"), the talking Shamisen, and the intelligent wolf actually exist naturally, and human perception simply disregards them; rather than creating these animals, Haruhi has simply altered the SOS Brigade's perceptions so that they notice them. Koizumi also denies that Arakawa realized the wolf was an extinct Japanese wolf despite treating it. Kyon believes that Koizumi is playing dumb.