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We begin, as always, a long time ago in a galaxy far, far away. Except this time, we're an even longer time ago… although the galaxy is just as far away.
Jedi Qui-Gon Jinn and his apprentice, Obi-Wan Kenobi, are sent as ambassadors to begin negotiations to end to the Trade Federation's blockade of the planet of Naboo. We know that sounds like the beginning of Mr. Jedi Goes to Washington, but it isn't long before the action kicks into gear.
Viceroy Gunray of the Trade Federation contacts his master, Darth Sidious (who is bad: how can he be good with a name like that?) and the dark lord tells him to begin his invasion of the planet and kill the Jedi. Qui-Gon and Obi-Wan fight their way through the droid battle station and make their way to Naboo. On the surface, they meet that unholy genetic combination of rabbit and amphibian: Jar Jar Binks. Jar Jar leads them to Gunga City, where the Jedi are fortunate enough to secure a transport and, less fortunately, Jar Jar as a traveling companion.
Important cultural side note: The Phantom Menace has been called out for portraying uber-offensive racial stereotypes. Jar Jar is one of 'em. We'll get into this in detail; don't you worry.
While the trio travels to the capital, the droid army occupies the city, which apparently has an open door policy for invaders. Viceroy Gunray captures the Queen and plans to have her sign a treaty to make the invasion legal—right after she's sent to Camp 4 to be "processed."
Qui-Gon and Obi-Wan rescue the queen and her court and steal a Nubian cruiser from the hangar. The ship runs the blockade, but its hyperdrive is badly damaged from the assault. Man, even though the Star Wars universe is extremely high-tech, hyperdrives always seem to be malfunctioning.
Qui-Gon orders the captain to land on a remote planet called Tatooine. He, Jar Jar, R2-D2, and the queen's handmaiden Padmé go to the spaceport to buy the parts they need but find their currency is no good. They meet a young slave boy named Anakin Skywalker and devise a plan where Anakin will compete in the Boonta Eve podrace to win a new hyperdrive from his owner, Watto. (Yup: that was a sentence with the words "Boonta Eve," "podrace," "hyperdrive," and "Watto." Welcome to Star Wars.) While spending time with the boy, Qui-Gon discovers he is immensely Force sensitive.
Anakin wins the race and—thanks to Qui-Gon enabling Watto's gambling addiction—his freedom as well. After the ship is repaired, Qui-Gon is attacked by a Sith warrior named Darth Maul, and he barely escapes with his life.
The group flies to Coruscant, capital of the Galactic Republic. Queen Amidala prepares to plead her case before the Galactic Senate, and Senator Palpatine of Naboo counsels her that Supreme Chancellor Valorum has no real power and the only way to secure help for her people is to displace him with a stronger chancellor. Gee, wonder who he has in mind?
During the Galactic Senate session, the Queen states her allegations against the Trade Federation, but the other delegates request that a committee be formed to investigate the allegations. Realizing that the committee will waste time while her people die, she motions for a vote of no confidence against Valorum.
Taking a break from Coruscant C-SPAN, we check in on Qui-Gon. The Jedi knight reports to the Jedi Council that he was attacked by a Sith warrior. While he has their attention, he also requests that Anakin be trained as a Jedi, believing him to be the one a prophecy foretold would bring balance to the Force. The Jedi Council tests Anakin but sense much fear in the boy. It seems test anxiety is a path to the dark side, so the council refuses to let Anakin be trained.
Senator Palpatine is announced as a candidate to replace Valorum, but Queen Amidala decides time is running out and returns to Naboo to solve the matter herself. On Naboo, Padmé reveals herself to be the true queen and brokers a peace with the Gungan leader, Boss Nass. She devises a strategy where the Gungans will distract the droid army while the Nubians capture the viceroy and destroy the droid control station. The Gungans are surprisingly amenable to being literal cannon fodder.
More surprising, Viceroy Gunray actually falls for the diversion tactic and sends his entire army to meet the Gungans. While the two armies fight, Padmé and her forces enter the city and assault the castle. There, they encounter Darth Maul, and the Jedi engage him in a lightsaber fight. Even Anakin gets in on the action when he activates the Naboo fighter he was hiding in to join the space fight for the droid control station.
Padmé manages to capture Viceroy Gunray, but the Gungans are captured by the droid army. Lucky for them, Anakin crash-lands inside the droid control station and destroys it from within, flying to safety as the station excitingly explodes around him.
Darth Maul kills Qui-Gon, but Obi-Wan manages to outsmart and kill the Sith. Of course, it's kind of difficult to learn the identity of your attacker when he's cut in two and thrown down an endless pit, but we guess the Jedi Council gave Obi-Wan a pass on account of the fact that he had a rough day.
Viceroy Gunray is sent to the Galactic Senate to answer for his crimes, and Palpatine is elected the Supreme Chancellor. Obi-Wan convinces the council to let him train Anakin as a Jedi despite the grave danger in doing so. Padmé and Boss Nass officially make peace between the Gungans and the Naboo. Happy endings all around!