They reach the Isle of the Dead. Claude comments that the place is a sanctuary for demons, but that Sebastian made quite a mess of it in his fit of rage. Hannah says that the two akuma will fight a formal duel here. — We see Ciel and Alois sitting in some sort of limbo; Ciel thinks the duel is absurd; Alois says that once his wish is granted Hannah will eat his soul, and then he’ll give Ciel’s body back. Sorry to do this, he says, but both Claude and Sebastian love you; it’s your punishment for being so refined. Ciel is scornful. Love, indeed, he says. You (they both use ‘omae’, equally contemptuous of each other =) don’t know Sebastian; you don’t know what he’ll do when he learns the terms of this contract.

In a cavern studded with green crystals, we see Ciel’s demon pulling off his glove with his teeth, as ever; as Claude holds Hannah, Sebastian extracts the twisted green sword from her. No attack can kill a demon, she says, but wounds inflicted by the demon blade never heal, and a soul wounded by it will meet its end forever. She hurls it up into the ceiling. With a single blade, we will fight for a single soul, the demons agree, and Hannah gives the signal to begin.

Claude gets first possession of the blade and charges Baz with it. Baz, eluding it, says the cave restricts his freedom of movement, and drives a stalagmite into the cave floor, saying he’ll split apart the entire island. Hannah grabs up the body of Ciel/Alois and whisks him to safety. As they resume their fight on the surface, the sword is torn away and falls toward a cavern; both demons plunge after it. It begins to rain as Hannah cradles Cielois in her lap. In the limbo space, Alois says that his revenge is complete. He was only staying alive for Claude to eat his soul, but his contract with Hannah brought that to nothing. Pathetic demons, fighting without a clue, says Ciel wearily; they don’t know that even if one of them wins, all he will get is...

we see Sebastian, with a vengeful grin, drive the sword through Claude. A tear runs down Hannah’s face. Sebastian tells Claude he was controlled and toyed with by Alois, and died according to his plan. (huh?) Claude asks for his spare glasses—he has them in his breast pocket—and Sebastian, looking sad and compassionate, places them on his nose. If Alois Trancy brought some spice to this listless demonic life, then it was worth it, Claude says. Sebastian, smiling, remarks that he’s surprised the other demon can still talk with such a fatal wound, and asks for his last words. Passion into disloyalty, lies into truth, and a stray dog into an earl...that is the...butler. --Claude’s eyes close and his head falls to the side. Sebastian looks down and asks him: as whose butler did you die, Claude-san?

Alois calls Claude's name; Ciel coldly says ‘it’s over’ and asks if Alois is satisfied. Who knows, says the blond; even I don’t know anymore. But—a smile—I think I’m happy not knowing. He begins to glow, and dissolves into light; he’s gone. Ciel stands and looks up defiantly. The truth is before your eyes, Sebastian, he calls out; what will you do once you know it?

Sebastian and Hannah stand at the edge of the cliff, Hannah holding Ciel’s body. She's glad that Claude acknowledged Alois at the end. Sebastian now only needs to kill her, and Ciel will regain his body, but--she says--even then, your young master will be as good as dead to you. – Sebastian gasps. Our happiness is complete, she says; Ciel Phantomhive---
and the edge of the cliff crumbles, taking her and Ciel toward the sea. She says more words we cannot hear, as she falls.
Flashback: Cielois and Hannah in the vine tower on the Trancy estate, at the end of episode 11. Hannah says she can cripple and enslave Claude if that’s her danna-sama’s wish, but no: what rankles in his heart is that both Claude and Sebastian are struggling for Ciel’s soul, and he tells her his wish is that neither of them shall have it.
Shall I kill them both? she asks coldly.
No, he says. I always saw Claude’s love before me, but I could never have it. That’s what I want them to experience. –we see Sebastian diving after Hannah and Ciel, wondering at the meaning of her words.

Hannah climbs up the cliff to where Claude’s body lies, pulls out the sword and tosses it away. Jim and Luka Macken, Claude Faustus and Hannah Annafellowes...she touches his face tenderly, saying ‘the love of we four will reach the other shore’. As the island begins to collapse into the sea, we hear Luka and Jim’s souls gladly greeting each other within Hannah, saying that at last they won’t be lonely anymore.

Sebastian dives deeper and deeper, desperately thinking of his bocchan. He remembers the first meal he cooked for Ciel and how the boy threw it into his face, saying it looked like good food but tasted terrible. I am a demon; I have no idea how human food should taste, he thinks - he finds Ciel, catches hold of him - I only understand the flavor of a human soul—-

The boy’s eyes open. They’re red.

Sebastian, without hesitation, stabs him. Blood pours into the water.

Morning at Phantomhive Manor. Sebastian wakes his master as usual and mimes preparing tea; he dresses the boy, all in grey and black. Ciel’s fingernails and toenails have turned black as well, like Sebastian's and Claude's. As he knots Ciel’s tie, the boy’s visible eye flashes cat-pupiled pink and he asks if Sebastian wants to tie it more tightly; he quietly says no. What is today’s schedule? Nothing is planned, says Sebastian. He pretends to pour a cup of tea from the empty pot, saying it’s New Moon Drop: the tea whose fragrance is like that of fathomless darkness. The demonic Ciel--no longer, of course, having any need for human food--sniffs the empty cup appreciatively and says it smells nice.

Meirin comes to the door, saying Lady Elizabeth is here. Demon Ciel hands the cup to Sebastian and walks past the maid out the door, saying he will decide today’s schedule. He does not put on either of his rings. Meirin looks helplessly to Sebastian, but his face is impassive. Downstairs, he tells Finny and Bard to wait on the Young Master while he attends to some business; they look at each other bewildered as he departs.

Elizabeth is delighted to see her fiancée, but disapproves of his dark clothing. She’s right, he agrees; should he change, as he did that other time? She’s not sure what to say, but Demon Ciel smiles sweetly and invites her to dance. They play an old gramophone as they waltz. She asks about the missing ring; his eyes flash pink and she’s dismayed, but he smiles again and they change back to blue. The music distorts eerily...

Sebastian delivers gift-wrapped boxes – black wrapping, black-and-white ribbon - to Lau and Ranmao (with the message that Ciel can’t be bothered to kill them, but they’d better stay out of his sight); Soma and Agni, Undertaker, and the Shinigami (he leaves the box on a tea table neatly set for three =); then returns to the manor, where D/Ciel is waiting in his carriage. D/Ciel tells the distraught servants that they can do as they wish with the manor; since it’s you lot, he remarks, you might as well burn it down. They protest that they couldn’t possibly do that, as it holds their memories of him, but D/Ciel smiles and says that he’s proven memories are meaningless. –as the trio watches the carriage drive away, Tanaka walks out to join them; he’s wearing the silver lapel pin of Phantomhive’s butler, which Sebastian has returned to him.

In the carriage, D/Ciel says he was waiting to see what Sebastian would do once he knew the final terms of the contract; but — he smiles — trying to kill me was truly amusing. Sebastian’s face shows nothing but exhaustion and despair. I served you as a butler because I was to eat your soul once you had your revenge, that was our contract, he says. Yet I’m here, alive, counters D/Ciel. The sun is setting. You’re alive, yes; but as a demon, not a human, says Sebastian, as we see D/Ciel’s red eyes.

(Sebastian is addressing him as “anata”-- a polite form of ‘you’, but still only ‘you’—-not as 'Young Master', ‘sir’ or ‘my lord’. )

Sebastian reveals Hannah’s final words: that while Ciel would regain his body, he would be reborn as a demon. That was why he attacked Ciel, he says. Quite the warm welcome, smiles D/Ciel; were you hoping to kill me before I awoke as a demon? No, I just wanted to be sure you really were, says the butler. D/Ciel commends him on his clear grasp of the situation, which is grim indeed. I will never be able to eat your soul, says Sebastian bleakly; and Ciel reminds him that in the rose labyrinth he had commanded Sebastian to remain his butler until he consumed every bit of said soul—-an order to which Baz at the time gladly consented. Demon Ciel takes off his eyepatch, and shows that despite his red inhuman eyes, the contract seal still shows clearly.

You will be my butler forever, he says.

Yes, says Sebastian. And since I replied 'yes' to that order, I am still one hell of...he takes off his glove (with his other hand, not his teeth!!), showing the contract mark...a demon’s butler.

We see Agni and Soma opening their gift box; it contains an ornately wrapped lollipop resting on a satin pillow, with a card that on exposure to air reveals its message:

They reach the edge of the cliff. D/Ciel smiles and says he feels good, as if he’s been freed from a long time under a spell. Sebastian says that he, on the other hand, has been placed under an eternal spell.
You are my butler, says D/Ciel.
Yes, says Sebastian, bitterly. For eternity.
From now on, says D/Ciel, you will have only one reply for me, and you know what it is.
He hooks his arm around Sebastian’s neck as the butler leaps off the cliff, and, as commanded, answers him:
"Yes, my Lord."