 Miss Hardbroom is lying unconscious on a little boat with Tabby, Mildred s smuggled cat, heading towards the rapids. Ethel and Drusilla have cast the boat adrift, not realizing that H.B. is on board. Mildred rescues she and Tabby from plunging to their death down the rapids but H.B. is still unconscious and the boat is stuck on the rocks. Meanwhile, Merlin has accidentally freed a Dragon Lord free from his captivity in a cave by the river. The Dragon Lord forces Merlin to take him to Algernon s riverside retreat where he tells everyone that the house is his. He claims that Merlin, whom he has mistaken for the long-dead Wizard, Mandrake, had stolen the house from him, along with his treasure. He s been left in the cave for so long, that he has lost track of time. The Dragon Lord wants his home back and his stolen treasure, or he will imprison everyone in the cave for all eternity as he has been. Cackle, Algernon, Ethel and Drusilla are in grave danger until Maud and Enid escape from the riverside retreat and rescue Mildred. She returns with the lost treasure, which was hidden on the rocks, and a magic amulet she finds inside it. Mildred faces up to the Dragon Lord and defeats him with the amulet. Even Miss Hardbroom, when she has recovered consciousness, finds it impossible to be too severe on Mildred (and she is allowed to keep her contraband cat!)