Late one night, Cadance meets Celestia on the castle ramparts. The moon is full, and high in the sky, but Celestia is quiet and subdued. They chat a little, fondly referring to each other as "Auntie" and "Caydee," as they used to do. After a while, there's a lull in the conversation, and Celestia takes a deep breath.
Celestia reminds Cadance that, many many years ago, Cadance had asked who her mother was, and Celestia had told her that she was the mare-in-the-moon. Cadance gives her a strange look, but says she remembers. Celestia hesitates, but confesses that she wasn't lying. With Cadance looking more and more disturbed, Celestia tells her the true story of Nightmare Moon, including how she had to banish her to the moon for her crimes (though she can't bring herself to tell Cadance the name of her father).
When Cadance finally finds her voice again, she speaks in low, wounded tones. She asks why Celestia is telling her all this. Celestia responds that the 999th Summer Sun festival will be held in about a month--one thousand years since Luna's banishment--and that she's worried that she might return. And, if she does return, she's worried that she might have to banish her again--or, perhaps, do even worse.
Cadance, her voice hoarse, asks why Celestia is telling her all this now. The one thing she's ever wanted is family, and never knowing her mom or dad has been one of the great struggles of her life. It's been a thousand years--why keep it from her, all this time, only to spill the beans now?
Celestia hesitates, then, cautiously, confesses that she was--and still is--ashamed. She feels that her banishment of Luna was a failure on her part, and that she didn't have the courage to confess how badly she'd ruined everything--especially not to Luna's own daughter, the one pony most affected by all this.
Both of them are quiet for a long moment. Celestia tries to reassure Cadance how much she loves her, calling her "Caydee"--but, at that, Cadance turns, and, calling her "Aunt Celestia," asks her to stop.
Celestia is stunned. Cadance has only called her "Aunt Celestia" once or twice before, and now, in this quiet, intimate moment, calling her that stiff, formal name hurts worse than if she had slapped her.
Cadance realizes that Celestia is hurt, and looks guiltily away. After a moment, she says that she needs some time alone to think through this. Celestia, still stunned, asks if she still be attending the Festival this year, as she always does, but Cadance says that she's not sure. Celestia leaves, then goes to bed, but it takes her hours to fall asleep.
The next morning, she asks a servant to invite Cadance to join her for breakfast, only to be informed that Cadance has left suddenly on an extended vacation/goodwill tour, and is not expected back for approximately six weeks (And, possibly, that she brought the Captain of the Guard, Shining Armor, along to keep her safe).
Celestia, once again, is stunned. Cadance isn't the sort to be dramatic or pitch a fit; in fact, her first concern is usually helping ponies who need it. The fact that she has left town, even after Celestia made it clear that she needs her help, is a testament to just how worked up she is over the revelation of her parentage. Celestia, deeply hurt, remains quiet and sullen for several days.
But still, there are preparations to be made: the Summer Sun festival must be planned for, and it's going to be held this year in Ponyville. Starswirl didn't give an exact date for the return of Nightmare Moon, but predicted it would be on about the 1000th year of her banishment; for this reason, Celestia doesn't want to be anywhere near the Castle of the Two Sisters. However, she has to do what she has to do, so she rallies a number of her Students to be in Ponyville under various pretenses in case she needs the help, including a fourteen-year-old Twilight Sparkle (she briefly considers telling her about the Elements, but decides against it; no need to worry her if she doesn't have to).
The day of the ceremony, Celestia arrives early and wanders the still-sleeping town, deeply uneasy. She reports, just before dawn, to Mayor Mare, who takes her to the platform on which she will make her grand appearance. There, hidden by the curtains, Celestia tries in vain to calm herself.
And, seconds before the curtains roll back, Celestia realizes, suddenly, that she's not alone.
She turns, and, to her horror, sees Nightmare Moon standing beside her on the platform. Before she can so much as gasp, Nightmare Moon's horn glows bright, and Celestia finds herself trapped in an inky void. She tries to struggle, but she can barely move; as she tries to light her horn, the voice of Nightmare Moon comes to her and begins to taunt her, telling her that struggling is useless--she's already lost. Celestia, defeated, begins to cry.
For what feels like hours, Celestia has to put up with Nightmare Moon's taunting, along with her own futile efforts at breaking out of her prison. Suddenly, Celestia hears Nightmare Moon begin talking to someone else. CElestia tries to take advantage of her distraction, but, a short while later, Nightmare Moon screams, and the darkness fall away. Celestia is disoriented and has no idea what's going on, but calls on her thousand years of Princess-ing to quickly gather her composure. She looks around and sees Twilight, Spike, and five ponies she doesn't recognize--each, to her astonishment, wearing an Element of Harmony. And there, in a corner, trying to crawl away, Celestia sees someone she never thought she'd see again--she sees Luna.
Celestia gasps and runs after her. She pulls Luna into an embrace, even though she weakly tries to push Celestia away. Despite her struggling, Celestia begins to cry again.
Cut to: the Summer Sun Celebration. The ponies of Ponyville are throwing an impropmtu parade, and Celestia is practically glowing with happiness. Not only is she still alive, but, somehow, she has her sister back, something she'd barely even dreamed of. Since the parade is starting to wind down, she goes to take her leave of her Students, including Twilight, when she realizes that something is wrong.
Celestia approaches Twilight and finds that, though the prospect of returning to Canterlot to continue to study with Celestia is everything Twilight has ever wanted, the thought of leaving her new-found friends is tearing her apart. As Twilight begins to tear up, Celestia realizes, with an almighty shock, that Twilight is feeling the same thing that she, herself, has had to feel far too many times--the pain of having to say goodbye to a friend.
Celestia, shaken, gives Twilight permission to stay in Ponyville, but asks that she write regular "friendship reports" (terminology she makes up on the spot, and which makes her wince as soon as she says it) to keep her updated on her progress. Twilight gives her new friends a group hug and Celestia, slightly crestfallen, climbs back on the carriage. Celestia tries to talk to Luna, only to realize that something is still very wrong with her.
[Excerpt: "Why so glum?"]
For the first two weeks home, Luna does little but eat and sleep. When she does speak, it's in harsh, unnatural-sounding Elizabethan English, the sort that they actually spoke back in the day. Celestia remembers enough of her dialect to speak to her, but Luna is hyper-sensitive to light and noise, and barely responds.
Eventually, Celestia has her recurring nightmare again--the vision she first saw in Sombra's magical nightmare, the vision of her being unable to move the sun--and, just as Celestia is about to break down crying, the sun goes dark. Celestia looks up to see a vision of Luna, tall as a mountain, standing there. She looks contemptuously at Celestia, then, with a flick of her horn, banishes her phantoms and sets the sun moving again, before suddenly vanishing. Celestia, still trembling, climbs to her hooves.
Celestia storms into their usual salon and finds Luna calmly eating breakfast. Celestia begins to lay into her--how dare she use her dark magic again, especially on her--but Luna fires right back. "Thou wert suffering, and now thou art not. Why upbraidest thou me?" etc. They argue for a few minutes, before Celestia can bring herself to confess that she's frightened--she doesn't want anyone, least of all Luna, in her head, especially not in her present state. Luna softens a little, then tries to reassure her--the magic she's using is "Onieromancy," the good dream-magic--though that's little comfort to Celestia. Luna solemnly promises that she will never enter Celestia's dreams again, which gives Celestia a little relief.
The two of them eat their breakfast in silence for a few minutes. Luna clears her throat and gently asks Celestia where the dream came from, as she could tell it wasn't entirely a dream of her own making. Celestia is unwilling to respond, and Luna doesn't press the issue.
Cadance finally returns from her vacation, having already heard the news about Luna. Cadance and Luna avoid each other for several days, both terrified of their meeting, but finally, with Celestia's help, they reconnect. Though Luna, still stiff and awkward, fumbles the interaction a couple times, they leave the meeting on good, though not especially close, terms. (Cadance may admit, privately, that, though she's always wanted to meet her mother, be she Luna or no, she has no idea what such a relationship should look like, while Luna admits that she doesn't feel worthy of having a daughter again, not after all the evil she'd done in the name of "protecting" her).
Cadance continues to be distant and cool with Celestia, which drags Celestia down. even though she's not actually surprised. She hadn't realized just how much family had meant to Cadance, and didn't know how much the revelation of her mother's identity--and the revelation of her own role in keeping them apart--would break Cadance's heart. Again, Cadance is not the sort to be vindictive, etc., but the fact that she keeps Celestia at arms' distance shows just how angry and hurt she is. Celestia hears, eventually, that Cadance got engaged to Shining Armor on her trip--but she hears it second-hand, from a pair of servants who are discussing the gossip.
Luna still speaks in Elizabethan English and continues to butcher social interactions (due both to her outdated manners and her being out of practice), but she slowly improves. Celestia notices that she's profoundly changed: where Luna used to be bubbly, sociable, and optimistic, she is now withdrawn, sullen, and fearful. Celestia suspects that this change is almost certainly the result of being possessed by a demon for over a thousand years, and, though Celestia begins to beat herself up, once again, for her failures, she tries to remind herself that there was little else she could have done.