After school, Fred Chiles-Reeves is approached by Fred Jones, his dad, also the mayor, and Sheriff Bronson Stone. They inform him of a Slime Mutant, and to not go looking for it. The gang visit Angel's station, K-Ghoul. They are attacked by a strange small silhoutte, which flies away, leading them all after it.
They arrive at the Crystal Cove caves, where they find cocooned workers, and slime everywhere. They take the body to the science teacher at high school, Emmanuel Raffalo. He observes the body. When the 6 leave, he is also cocooned by an unknown creature. The next day, Velma Dinkley takes Shaggy Rogers to Fruitmeirs for a date, in which Scooby-Doo nearly finds out about. The whole store is attacked by the Slime Mutant. The gang spy on the manger Franklin Fruitmeir throughout the day, then Fred is cocooned while driving with Daphne Blake later.
The gang save Fred after finding out Franklin's food is responsible for the cocoon and slime. Now knowing Franklin must be the creature, they encounter a scary looking man named Mr. Machine, telling the kids to not get into trouble and tries to stop them from solving the mystery. Scooby and Shaggy suspect him. In the sewers, they discover a locket, that Machine tries to steal. The Slime Mutant then attacks the gang and Machine, who vanishes deep into caves. The monster is caught and revealed to be Raffalo. The locket has nothing to do with the case. Meanwhile, an even scarier man known as Mr. E (unseen and the boss of Machine) calls the gang and Angel and tells the scary guy (Machine) was right, and that the real mystery has just begun.