Loki was able to take out all the humans that Capricorn summoned.  Capricorn then told him that he is using some taboo magic and then he transferred into Loki.  Before he transferred, Loki punched Capricorn with Regulus.  We’re seen a sinister face of Loki which means that Zoldeo has fused with Loki.  As he is thinking up ways to kill Lucy and enjoy his new body he was hit by Regulus in behind which defused his real body with Loki.  Capricorn then proceed to tell his side of the story where his master is Lucy.  The trio was told about Leo’s win over Capricorn and they have gained a new ally but because of the damage he sustain he is going back into the spirit world for recovery to the dismay of Grey who still needs a partner for the competition.

Leo Getting A "Light" Punch

You can read it on Mangastream.  You can also check it out here (once Mangastream takes the link down).