The Disc confrontation was a major conflict taking place on January 20, 2021 in which Tommy and Tubbo confronted Dream for Tommy's discs. It also ended the long conflict of the Disc Saga.

On January 16, 2021, Dream burned down Tommy's house and left signs telling Tommy to meet him with Tubbo on January 20, 2021 if he wanted his discs back. In the chest below the signs, Dream provided a lodestone compass named "Your Discs" pointing to an unknown location.

Prior to leaving the Greater Dream SMP to confront Dream on January 20, Tommy and Tubbo said their farewells to other members of the server including Ponk, Sam, Niki, Jack Manifold and others.

After crossing the forest separating the Greater Dream SMP from the ocean, they followed the compass until they reached a savannah extreme hills biome. As they reached the top, they found Dream, clad in full netherite armor and holding an ender chest. To taunt the two, Dream decided to play a Mellohi disc in a jukebox enclosed by obsidian. The two decided to strike first, attempting to kill him. However, they struggled with this, and while they managed to secure Mellohi, they eventually had to stop as Dream laughed, telling them he hadn't even used any potions and hadn't been particularly trying yet.

Dream took Tubbo hostage, demanding the disc back in exchange for Tubbo's life. Tubbo pleaded for Tommy to keep the disc and sacrifice him, but Tommy refused and returned the disc to Dream. Dream laughed at him for returning the disc, explaining that it had been a fake. He revealed a fake Cat disc and threw it alongside the fake Mellohi, and blew both of them up.

Dream then told Tommy and Tubbo to throw their items in a hole, just like he used to tell Tommy during his exile. The two reluctantly complied out of fear of Dream's power, as he was still threatening to kill Tubbo. Their items were blown up and Dream escorted the two of them to the bottom of the mountain. Dream then admitted to blowing up the Community House, adding that nobody would ever know since the two of them wouldn't be able to return to tell the rest of the server.

Dream broke a few blocks on the side of the mountain, revealing a small hollowed-out room with a blackstone and obsidian pad on the floor. Dream forced Tubbo and Tommy to step onto the pad, which turned out to be an elevator. The room the trio descended into was a massive blackstone vault that stretched down to y-level 5. It contained a large Nether portal, two ender chests, and pictures of Mellohi and Cat, as well as the two real discs on golden pads on the floor.

Dream gave Tommy a chance to take the discs in exchange for Tubbo's life, which Tommy refused. Dream then took them down a corridor to the side of the room, lined with item frames, fence posts, and cages to contain items and beings of value to certain server members. Notable examples include Carl and the Axe of Peace for Technoblade, Friend for Ghostbur, Skeppy for BadBoyHalo, and Fran for Sam.

Dream told Tommy that Tubbo would now be killed, and gave the two a chance to say goodbye. Tommy refused to accept this and started threatening Dream, but Tubbo told him to accept it, having seemingly come to terms with the prospect of his own death. However, Punz emerged from the Nether portal next to the discs. Dream questioned Punz upon his arrival, and Punz stated that Dream "should've paid him more", referring to the fact that Punz was usually on Dream's side during conflicts due to the payment Dream gave him, similar to a mercenary. A large amount of other SMP members then followed him out of the portal - Eret, Callahan, Sam, Sapnap, Niki, Bad, Antfrost, HBomb, Puffy, Jack Manifold, Ranboo, Ponk, and Quackity. Tommy and Tubbo took their chance and fled towards the group. Dream tried to chase them, but the rest of the group blocked his way. Tommy and Tubbo quickly took the discs, with Tommy taking Mellohi and Tubbo taking Cat. The discs were quickly placed into the conveniently placed ender chests and were secured.

Tommy then stepped up at Dream and told him to kill him. Dream seemed tempted by the offer but ultimately couldn't, as this would end the one-sided "game" he plays with Tommy, and also result in the rest of the present SMP members turning on him. Tommy received a pickaxe from Sapnap and ordered Dream to drop his armor and other items into a hole, reminiscent of how Dream used to treat Tommy during his exile. After a short hesitation, Dream complied and dropped everything in the hole. However, instead of blowing up the items, Tommy immediately jumped in the pit and equipped them.

Dream tried to convince Tommy that he wouldn't kill him, with some very poorly placed reasoning of them "having had fun together". Tommy killed Dream with the Axe of Peace he had taken off the wall moments prior. Dream then came back down into the vault via the elevator and told Tommy not to kill him again. However, Tommy ignored this and Dream was killed once more.

Tommy demanded that Dream come down so he could take his third and final life, which Dream refused. Tommy retracted his statement about killing Dream, instead asking him to come down so they could talk. However, Dream still refused, so Tommy threatened to kill himself if Dream didn't comply. Reluctantly, Dream complied, and was shot by Tommy with a crossbow once. He then started begging for mercy, revealing that he had the power to resurrect others. Tommy stopped trying to hurt Dream and asked whether he was lying, as Dream is known for his lies and manipulation. Dream revealed that the book of dark secrets he had received from Jschlatt months ago, just before the Manberg vs Pogtopia War, in order to make Dream defend Jschlatt, contained information on how to bring back the dead.

Tommy asked if Dream could resurrect Wilbur and Dream said yes. Tommy trapped Dream in an obsidian box and apologized to everyone else for what he had done, stating multiple times that he had messed up, and been a bad person. He then demanded that Dream tell everyone what he had done, and Dream reluctantly revealed that he had been the one to blow up the Community House. However, he refused to admit anything else, and stayed silent when Tommy told him to explain what had happened during Tommy's exile. Instead, Tommy told everyone that Dream had been manipulating the entire server and collecting their prized items in an attempt to gain control over them, and that he was the root cause of all their problems. The coalition noticed the collection, in which they find that everything Tommy told them was true. Sapnap retrieves Beckerson and the rest of the group is in shock about Dream's master plan.

As punishment for Dream's crimes against the server, Tommy believed that they should kill Dream and deal with being forever mortal. Dream begged for forgiveness and says that he would be good from here on out, that Tommy could do whatever he wants with him and can exile him, torture him, or anything he pleases. Then, Sam came forward and told Tommy that there was an alternative - locking Dream inside Pandora's Vault, the prison that he himself had commissioned to be built. Tommy agreed, and after Tommy's speech, Dream was let out of the box. An escort force made up of BadBoyHalo, Sam, and Sapnap escorted Dream to Pandora's Vault via overworld transportation.

Tubbo and Tommy headed back to their bench outside Tommy's house, and realised that it hadn't been the last time they had seen the Prime Path after all. They listened to the discs and talked to some sort of manifestation of Wilbur, who told Tommy that he was proud of him, and that he didn't want to come back to life. Tommy gave the gear he had taken off Dream to Tubbo, and Tubbo locked it inside his vault at Snowchester, saying that the armour had caused them too much grief to be used again.