Set in a desert land where the stooges run a restaurant, the boys set out to recover the stolen Rootin Tootin diamond after they learn from the thieves that the Emir of Shmo has absconded with the contraband jewel. They journey to the stronghold of Shmo where they disguise as Santa Clauses and scare the ruler into giving them the diamond.

The stooges are tricked into becoming stowaways by their neighbor "Borscht", a spy for an enemy country. Stranded on a freighter on the high seas, they discover that their friend has concealed some stolen microfilm in watermelons they brought aboard for him. After a wild chase, they subdue Borscht and recover the microfilm.