The cover shows an eel breaking through a porthole.
Billy and Sheena are back, and once again visiting their marine biologist uncle, Dr. Deep. He is searching for a sunken pirate ship, the Scarlet Skull, which vanished in a black cloud back in the 1780's, along with millions of dollars worth of gold and jewels. While onboard their submarine, the Deep Diver, the trio pass through a black cloud themselves, which causes a temporary loss of power and somehow relocates Dr. D away from the submarine. After he vanishes, the sub crashes into a ship that turns out to be the Scarlet Skull and is promptly attacked by zombie pirates.
After making it back to the surface, Billy and Sheena leave the submarine and swim to a nearby island. Billy's leg is injured in leaving the sub, forcing him to use a piece of driftwood as a crutch. However, they soon find the zombie pirates and fall into a pit. They manage to escape with help from the driftwood, but are captured by the pirates and taken before their captain, Long Ben One-Leg, who has captured Dr. D and demands they return what is his.
Thinking he means the treasure, Billy and Sheena go to find it, only to run into a couple of strangers, Roger Baldry and Goldy Munroe. They claim to be photographers and help them in bringing the treasure back to the surface. However after bringing the treasure up, the two turn out to be zombies as well, the original owners of the treasure before Captain Long Ben One-Leg and his crew stole it from them. The pair explain they dove into the black cloud as well after giving chase, and have been hoping to get the treasure back ever since. They then throw Billy and Sheena overboard.
Roger then touches a red jewel in the shape of a skull on the treasure chest, only to find that it's a trap; both he and Goldy are turned to ash by it. With the two pirates gone, Billy and Sheena return to their boat, and then to the Cassandra (Dr. D's boat). However, moments later, the Scarlet Skull rises from the depths, with Captain Ben and Dr. D aboard it. Billy and Sheena try to return the treasure, only to find that Captain Ben is not after the treasure; he wants his leg, the "driftwood" Billy has been carrying around. Billy returns it, by throwing it like a spear at him, knocking the captain overboard. The Scarlet Skull falls apart without its captain.
After Dr. D climbs aboard, the trio pass through the black cloud again; which Dr. D explains had transported them into a Dead Zone, the realm of the dead. Passing through it, they return to the land of the living -- only to find the chest has disappeared, leaving only the red skull, which is now powerless. However, as Dr. D tries to reach someone on the radio, they hear the pirates chanting over the transmission.
Later in the summer, Billy and Sheena receive an free invitation to the HorrorLand theme park. Neither of the siblings know why they were chosen to go, but both they decide to go to HorrorLand anyways.
After spending the morning meandering through HorrorLand, Billy and Sheena go back to the Stagger Inn. In the lobby, Billy notices two girls, Britney Crosby and Molly Molloy, who look very distressed. When Billy and Sheena talk to them, the girls say that their parents are missing. Billy and Sheena say that the same thing happened to them, but they overheard a Horror saying that their parents had simply been moved to another hotel in order to scare the kids. Britney is still confused by her picture of Slappy, but when she searches for it, it is gone.
The four kids decide to explore HorrorLand, and they go to Quicksand Beach. Billy becomes scared when he and his three acquaintances begin drowning in quicksand. As Billy sinks, he hears the chanting of pirates... However, before Billy drowns, he realizes that he is in a waterslide. At the end of the slide, a Horror pulls Billy off, and he is reunited with Sheena but not Britney and Molly. Billy and Sheena start looking for Britney and Molly, and they end up going to The Play Pen. In The Play Pen, they see a boy who wields a gray card and wins every game. The kid is spotted by the Monster Police, but before the police can catch him, he gives his card to Billy and runs off.
Later, back at the Stagger Inn, Billy and Sheena run into the boy from earlier. He says his name is Matt Daniels and that the card was lucky and that it was given to him by a Horror. The three kids go in search of Britney and Molly. The group sees Britney and Molly inside of a locked cafe. They use Matt's gray card to unlock the door, but when they get inside Britney and Molly are gone. And more shockingly when they look at themselves in a mirror, Sheena has become invisible!
Captain Ben appears in the Goosebumps film as background monster. Although he is dead, he looks like a real pirate in the film.
Cover art gallery
- Unlike its predecessors, this books deals with pirates instead of sea creatures.
- Apparently, Deep Trouble II never happened and this book seems like a retcon. In this book, Billy is twelve and Sheena is eleven, the same age in Deep Trouble II.
- The reader would not have known who Matt Daniels was, as he wasn't officially introduced until the next book.
- Despite the picture on the cover being an eel, there are no eels in the the book except in Billy's daydream.