When a debonair ghost ship captain named William Stansbury sweeps Rebecca off her feet, she enjoys what she thinks is a dream. When Baloo and Louie decide to exorcise the ghost, Rebecca is forced to choose between her dream and her daughter.

Colonel Spigot is charged with presenting a golden sprocket as a gift to the Mayor of Cape Suzette. However, Trader Moe wants to steal the sprocket, and it's up to Kit and Baloo to stop him and help Spigot.