While Barry and Ash were having a battle, a Xatu appeared and Barry followed it, forcing Ash and Dawn to do the same. Barry followed it because when he was younger, he tried to go where it led him, but he was too young to continue any farther. The three saw a tent; a clown and many Psychic-type Pokémon stepped out, describing the place as a location where one can become one with their past, present, and future. The three went in, experiencing important events in their lives. All three of them were also shrunken. Ash relived the event when Spearow attacked Pikachu and they bonded. Dawn relived the event when AriadosattackedPiplup. Barry relived the event when he slathered honey on a tree and found Heracross.
While experiencing these events, all three also saw a Natu, Xatu's pre-Evolution. When they followed the Natu, they saw each other again. In order to get out, they had to hit a Camerupt on its side, which was almost exactly similar to a booth Brock was running at the time. Afterwards, Barry and the others noticed the circus tent has strangely disappeared. Palmer also greeted them, admitting he had visited Xatu's Forest once before.
This article is part of both Project Anime and Project Locations, Bulbapedia projects that, together, aim to write comprehensive articles on locations in the animated series.