Ostensibly, the villain of this episode is the Rainbow Raider, a.k.a. Roy G. Bivolo. (Cisco comes up with the name "Prism" for him, but at the end, Snow suggests "Rainbow Raider." Oddly no one suggests his current DCU name, "Chroma.") He matters exactly none, though. Spoiler alert: The Flash and Arrow catch and detain him in STAR Labs' Ghostbusters containment unit thing during a commercial break. No joke. It came back from a commercial and he was in super prison.
Rainbow Raider is a means to an end, and that end is The Flash and Arrow getting into a very weirdly staged fight that ends in flashing dance club lights. Truly the world of Arrow has indeed come to Central City!
We're introduced to Rainbow Raider, who looks like he's cosplaying Crispin Glover, in a scene of true Batman '66 proportions (and I mean that in a complimentary way). He walks into a bank, flashes his eyes red at everyone inside and enrages them. This causes everyone in the bank to start fighting each other pro wrestling style, smashing each other over the back with chairs and whatnot. It's fantastic. All the while, Rainbow Raider saunters into the vault and steals a bunch of cash.
As he's leaving a woman who suddenly has a gun (maybe she grabbed it off a guard) fires away at a dude in the bank. The Flash blasts in and pushes the guy out of the way, and everyone quickly snaps out of the trance.
After that, the cops and the STAR Labs crew have a tough time pinning down Rainbow Raider, even though he has to be the only guy who looks that much like Crispin Glover in Central City (which I like to call "Daytime Starling").
Eventually, Joe West traces Rainbow Raider to a storage facility that seriously looks like a barn. Barns are apparently to this show as abandoned warehouses are to Arrow. Anyway, Rainbow Raider pulls his rage trick on one of the cops, who then turns around and blasts his shotgun at Joe and the others. The Flash then does a replay of HIS trick of knocking people out of the way of gunshots. Real one-trick ponies here.
Speaking of one-trick ponies, Arrow shows up as things are winding down and shoots a police officer in the chest with two arrows. This is the very first thing he does in this crossover. It could not be more accurate to the character.
After not getting punished for that at all, Arrow then returns to the storage facility and brutally interrogates the owner about who Rainbow Raider is. Ollie then relays that information to Barry, despite his stated intentions not to have a crossover with him. He just won't! But then Felicty Smoak talks him into it.
After Smoak covertly installs some facial recognition software on STAR Labs' computers (she is such a generous computer hacker), the STAR Labs crew identifies Rainbow Raider at what I'm simply going to call A Dark Building. Despite officially being teamed up with Arrow, The Flash goes to fight Rainbow Raider alone, and in the process gets the rage red in his eyes like the people at the bank (the show called it being "whammied.")
We don't see how that encounter ends at all; we're just told that Rainbow Raider got away somehow. From the fastest man on the planet, who didn't immediately exhibit signs of being harmed by being whammied. Does this much action usually happen in The Flash's commercial breaks?
Team Arrow and The STAR Labs crew quickly figure out that Barry has been affected by the whammy, but it's affecting him slower than normal people because of...his faster immune system? If anything, it seems like it should be out of his system faster, but it's comics logic, so I'll go with it.
Enraged, The Flash seeks out Eddie Thawne, who is riding in a car with Iris West, and tosses him out the car window out into the street. It looks like he's about to straight-up murder Thawne, so Thawne pulls out his gun and starts shooting. The Flash dodges the bullets. Iris pipes up and almost talks him down, but The Flash's eyes glow red again and he goes back into murder mode.
"You don't know me!" he tells Iris. He's really acting a lot like Arrow at this point.
Then Arrow pops up and shoots The Flash with a rope arrow. He tells Iris and Thawne to run, which they do. So does The Flash, who runs the two costumed heroes into a nondescript alley so they can fight in peace.
The fight that follows is super weird. The show makes a big deal of Arrow not having superpowers while The Flash does (more on that in a sec), but Arrow completely no-sells The Flash's high-speed punches and manages to shoot Barry with arrows multiple times because Barry spends a lot of time during the fight just standing around. Either Barry's a super-weak idiot or Arrow dipped himself in liquid steel before going on this trip to Central.
The fact remains: Arrow is a regular guy, and The Flash is a literal blur on the screen. This should be no contest. And yet, when the fight ends because Wells and Joe ride up in a van and blast flashing white and pink lights at The Flash to get rid of the red in his eyes (?) to snap him out of it, Cisco announces, "It's a tie."
Anyway, The Flash and Arrow become buds again and catch Rainbow Raider off-camera. Fun times!