Following what seems to be trend of the third season of the series, this episode's story takes us out and away from Atlantica into a brand new environment, and is more action/adventure-oriented. It is here that Scuttle also joins the gang, having first met them in a previous episode.
It starts out looking like a normal day. Ariel and Flounder are meeting up with Scuttle to ask him to decipher a new collection of human things, while Sebastian and his Crab Scout Troupe are preparing for a lazy day lounging on the beach. Suddenly a trail of mysterious super-stinky ooze appears in the water, causing all fish and creatures that come into contact with it to get sick. The trail is heading to Atlantica, so the Crab Scouts go off to warn King Triton, while Ariel recruits her friends go into the opposite direction to find the source of the ooze.
Their journey leads them to a spooky castle on what is presumably the Island of Fear of the title. Ariel, Flounder and Scuttle venture into the watery basement of the castle while Sebastian volunteers to stay outside as a lookout. But as it turns out, Sebastian is in the greatest danger because he is then captured by Dr. Vile, a Mad Scientist who is obsessed with his "Crab Experiments". Sebastian has become his newest subject, doomed to become like one of the many Giant Mutant Crabs in Dr. Vile's castle.
Sebastian manages to escape Dr. Vile's experiment table and while he is loose in the castle, he crosses paths with Daniel, a young boy who is Dr. Vile's apprentice. Despite all of Sebastian's previous suspicions of humans, in his panic he begs Daniel for mercy, revealing to the boy his ability to speak. Daniel, lonely and in need of companionship, decides to protect Sebastian as a friend slash pet. And despite Sebastian's reservations, he starts thinking of Daniel as a friend as well. So in this, the most unlikely of places, a friendship is born.
But Dr. Vile wants his subject back stat. Sebastian is about to be mutant-fied but is saved at the last moment by Scuttle. Ariel and Flounder, who were facing troubles of their own, also manage to escape and meet up with their friends, but when they start to leave, Sebastian declares that he can't. Daniel needs rescuing as well.
Some human things are creepy.
The Crab Scouts looking forward to a day of R&R.
Sun, sand and surf! What more can you ask for?
Arriving at the Island of Fear.
Dr. Vile, the Mad Scientist's Mad Scientist.
This episode sees the return of the Crab Scouts.
|( Discussing the handbag that Scuttle says should be worn on the head. )
|Hudameister? Why don't they just call it a headbag?
|Humans must be very complicated.
|Sunblock. Too much sun's not good for you, man. I'm red enough already.
|I'd be much better use to you as a live crab! I can sing - laaaa - I can dance - I can whistle - uh, well I used to be able to whistle - I can tell jokes! Although right now I can't think of any. I guess I'm not in a funny mood. I could be a paperweight!
|Scuttle, what are you doing?
|Don't worry, we'll make it.
|Of course you'll make it, you can fly!
|Where's the crab, Daniel? Talk! Or I'll turn you into a human crab! And if that doesn't get me into the Mad Scientist Hall of Fame, I don't know what will.
|Sebastian is talking to a human!
|Thanks to you, I'll never let myself be trapped in a bad situation again. I'll just walk away. Nothing's worth being mistreated.
|Goodbye, my spooky little friend!
|A talking crab. And he calls me spooky.
Sebastian doesn't want to turn into a mutant crab.
First impressions can be deceiving.
Dr. Vile shows what Sebastian might end up looking like.
Back into the castle we go.
Daniel doesn't want to work here anymore.
It's implied that if the series hadn't been cancelled, Dr. Vile would have become a recurring villain.