The game takes place in the spring of AW 1284, about 7 months before the events of Phantasy Star II.
This chapter features Nei (Japanese: ネイ, Nei) - a Numan created through an experiment to breed humans with biomonsters. After her escape from Neifirst, Nei has sought refuge at the home of an elderly couple, however, since Nei was not meant to exist, a bounty was placed on her. After being found by hunters, the home she belonged to was burnt down. Nei manages to flee to the nearby town of Paseo, where she wanders the streets looking for a place to stay. She has a few encounters with the hunter responsible for killing the people who took care of her, eventually leading up to her rescue by Rolf, who adopts her as a little sister.
Each of the Phantasy Star II Text Adventure games had identical gameplay mechanics which were. On the screen are small graphics showing an on-screen event as well as a textual description of it. The player can progress through the game using the "Move", "Look", "Take", "Use", and "Drop" commands. The player also has HP, which factors into battle sequences, and MST (Meseta), currency used in shops.