This episode showed Amu and the guardians coming to the conclusion that Nikaido is indeed responsible for the X eggs. All evidence points to him, but before they figure that out they all have time for some magic.
Secretly, one of the fourth graders at their school is the famous television magician, Zero. He is adored all over, but people don’t realize that his magic is all computer generated effects. He is actually a talented magician for someone his age and can work cards in his hands like a pro, but television demands more, so he had to give up his magic and become a fraud. Of course, giving up his magic made his shugo chara return to its egg. Yes, Takuya, “Zero,” had a shugo chara at one point (he actually got his stage name from his shugo chara’s name).
The episode pretty much revolves around the guardians helping Takuya do his “real” magic in front of people so that he can see their smiles and I guess vent his frustration from being a fraud. He constantly works hard in order to hear the voice of his imaginary friend, Zero (shugo chara), but during all these efforts Nikaido is up to no good again.
Proceeding with the X egg experiments, Nikaido desires to further test eggs from children that are already talented (Like Mihuyu the snowboarder). Apparently he is gathering more and more data from these encounters in order to get closer to making his embryo. This leads him to turn Takuya’s egg into an X egg. The X chara is born, but Amu goes Amulet Spade and fixes everything.
Also: Suu’s power of cooking extends into sewing clothes too, because she skillfully makes Takuya an outfit to appear in front of the school body. I thought that was odd, because I though Suu was supposed to be a cook/chef type shugo chara, but I guess she is more of a housewife. Housewife skills include sewing in this case, so let’s see what else she can do.