After their return to Magnolia, Gray arrives in Lucy’s apartment, much to her dismay, to remind her that Natsu and Erza are about to begin their fight. As he watches, he is shocked to hear that Erza is to be arrested for property damage by the Magic Council. 
Sub-Zero Emperor Lyon arc
Gray waits for Erza’s verdict like everyone else, but he learns that it was all a hoax and he voices his displeasure about that.  After Mystogan leaves and lifts the Sleep Magic, Gray explains to Lucy about Mystogan’s actions.  When Natsu, Happy, and Lucy take the S-Class request to lift the curse of Galuna Island, Makarov orders Laxus Dreyar to go after them, saying that he is the only one who can force them to come back. However, Gray stands up and volunteers to get them back instead. 
Gray catches up with the three in Hargeon, who are looking for a boat to take them to the island. Gray tries to persuade them to go back, but when Natsu resists, Gray tries to use Magic. Bobo, the boat owner, then spots them using Magic and tells them that he will take them to the island. Natsu sees this as an opening and knocks Gray unconscious, ties him up and brings him along. On their way to the island, Bobo shows them the effects of the island’s demonic curse.  Bobo then vanishes, and although Happy checks to see whether he has fallen into the water, he is nowhere to be found. All of this is rendered irrelevant when a large wave hits their boat and washes them ashore. Gray, now agreeing to help, goes with Natsu, Lucy, and Happy towards the island’s village and meets its mayor, Moka, who asks them to destroy the moon and lift the curse. 
Deeming such a task impossible, they instead investigate the island’s forest, getting attacked by a gigantic mouse which they defeat. In the process, the team manages to locate an abandoned temple. Natsu, commenting on the it with his foot, causing it to crumble and hurtle them downwards into a cavern, also making Happy almost swallow a bone he had found. Lucy saves him from choking by pulling it out of his throat. In this cavern, they discover https://loansolution.com/payday-loans-nj/ the frozen Demon Deliora along with three Mages: Sherry Blendy, Yuka Suzuki and Toby Horhorta, who converse about Angelica’s defeat. Gray explains to the others what Deliora is: an immortal Demon that destroyed Ishban 10 years ago, and was sealed by his teacher, Ur, at the cost of her life. 
On their way to the village, Natsu comforts him for losing, saying that they are from Fairy Tail, a guild that doesn’t know when to stop
The group decides to wait for the moon to come out to observe its involvement with the frozen demon. Lucy brings out her Celestial Spirit Lyra to pass the time. Happy wants her to sing a fish song, but Lucy tells Lyra to sing anything she likes. Her ability to sing songs reflecting what one has in their heart moves Gray to tears, much to the surprise of the others. When night arrives, they discover that the moonlight is hitting the Demon via the ritual Moon Drip which would melt the ice. As the team is hiding, Reitei Lyon, Sherry, Yuka and Toby arrive. Reitei Lyon inquires about the Moon Drip ritual, and, upon hearing that there are some intruders, orders the other three to obliterate the village as they are the only humans on the island. 
Enraged by the order given by Reitei Lyon, Natsu jumps out from hiding and attacks alongside Gray. Natsu is quickly frozen, and Gray tells Happy to escape with Lucy while he continues to fight Lyon.  After Happy and Lucy leave, Gray kicks Natsu down the hill to protect him from Lyon’s Magic. Gray then argues with Lyon about his motives, saying that Ur died to seal Deliora and that he is trying to destroy Ur’s legacy. Lyon then asks him how he can live with the knowledge that he killed Ur.  The two then battle. While battling, Lyon reveals that he will resurrect Deliora and kill it, defeating that which Ur could not and allowing him to surpass her. Gray tells him it’s impossible, but Lyon reminds him that that was what they said to him, but he challenged Deliora anyway, resulting in Ur’s death. Overcome with grief, Gray loses the battle and falls into unconsciousness. When he wakes up, he sees Natsu, who carries him back to the village.