After Kit gets into an argument with Baloo about taking unnecessary risks, he runs away to join an air circus led by Daring Dan Dawson. However, Dawson makes Kit perform more dangerous and wilder stunts and it's up to Baloo to rescue his navigator.

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.