Mayor Goodway and Katie are on the beach rehearsing their hula performance when Mayor Humdinger shows up to taunt them, even as Katie and Goodway tell him they are rehearsing for the opening of Adventure Beach. With some double talk, Humdinger is able to convince Goodway to invite him to the luau.
Meanwhile, the PAW Patrol are at their new Sea Patrol HQ to train for their new lifeguard duties at the beach. Though all of the pups manage to complete their training, Rocky hesitates to complete his due to his aquaphobia, and Ryder worries he'll never earn his Sea Patrol lifeguard badge if he doesn't get wet.
Meanwhile, The Flounder is nearby, and Cap'n Turbot is feeding Wally when his sonar alarm goes off. Concerned, the Cap'n decides to head for Seal Island, but before he can, large tentacles wrap themselves around his ship, forcing him to call Ryder for help to save his vessel. Unknown to the Captain, a baby octopus had skittered onto the ship and tried to steal some of Wally's treats to eat itself due to having a large appetite. While the Captain awaits Ryder and the pups, the baby octopus mistakes the pineapple slices on his life ring for food and hides inside it to avoid being seen.
Ryder and the pups have just arrived to dig in to the buffet when Ryder gets Cap'n Turbot's call for help on his wristwatch pup-pad. Summoning the pups back to the Sea Patrol lookout tower, the pups suit up in their lifeguard gear and report for duty. Ryder assigns Zuma and Rubble to assist with their new Sea Patrol vehicles, while having Chase and Skye perform lifeguard duties back at Adventure Beach. Rocky is upset at not being able to help, but as Ryder said, until he earns his lifeguard badge, he's restricted from helping. With everything ready, Rubble asks how they are getting to The Flounder, and Ryder lowers them into the bridge of their newest vehicle to the PAW Patrol Motor Pool, the Sea Patroller, manned by Robo-Dog like all the other large vehicles. At Ryder's command, Robo-Dog loads Zuma and Rubble's boat vehicles into the ship, and the Sea Patroller deploys from the Sea Patrol HQ and heads for the sea, as Chase and Skye watch from shore and cheer in amazement.
As the Sea Patroller reaches The Flounder, the tentacles are still gripping it, and when Ryder has the Sea Patroller moved closer after Zuma and Rubble deploy, more tentacles appear to grab the Sea Patroller. One tentacle grabs Rocky and threatens to dip him in the drink, but Marshall headbutts it, forcing it to let go of Rocky, saving him from ending up in the water. Despite the pups and their best attempts to fight off the tentacles, it takes Robo-Dog blaring the Sea Patroller's horn to finally fight off the tentacles, but the damage is done, as The Flounder sinks to a watery grave, leaving Cap'n Turbot heartbroken. Zuma and Rubble take him back to Adventure Beach, but as they do, the source of the tentacles, a large mother octopus, surfaces to see her baby being taken back to Adventure Beach with Cap'n Turbot. Worried, she dives to go get her baby back.
While Cap'n Turbot does his best to cheer up at the luau, Rubble and Zuma report the situation from Ryder to Chase and Skye, and Rubble takes over for Chase as he moves to get everyone out of the water while the baby octopus tries to dig into the buffet, causing some problems as it does with Mayor Humdinger and Cali in the process. The first incident is when the baby octopus eats Mayor Humdinger's meal and a few other pieces of food before hiding among the tablecloth's flower patterns to avoid being discovered. The second is when it continues to dig in without abandon before accidentally grabbing Cali without realizing it, resulting in Cali chasing the baby octopus down until it takes refuge on Humdinger's back, then clings to his head once Cali points it out to Humdinger, refusing to let go.
Back at the Sea Patroller, Ryder has Marshall head down in his new Sea Patrol scuba gear to pump air into The Flounder to re-float it, while Rocky still hesitates due to his aquaphobia. After Marshall raises the ship, he finds what appears to be some sort of rattle that was lying on the seabed under the ship.
Meanwhile, at Adventure Beach, the mother octopus arrives to find her baby, but her vision is so bad, she mistakes several objects for her baby, causing panic and chaos at the beach. This catches the attention of Rubble and Skye when Mayor Goodway requests their help, and Rubble realizes they need to call Ryder and let him know of how bad things have gotten.
Back at the Sea Patroller, Marshall succeeds with re-floating The Flounder, while Rocky is disappointed in his inability to help because of his aquaphobia. However, Ryder gets the call from the other pups regarding the mother octopus, and has the Sea Patroller return to shore to investigate. Once they help rescue Katie, Mr. Porter, and Farmer Yumi from the mother octopus, with Skye using the parasail in her Sea Patrol Pup Pack to distract her and ask that she let them go, they find the baby octopus clinging to Humdinger's head, and Ryder finally realizes that the mother was looking for her baby, who was looking for its lost rattle that Marshall found, along with eating whatever it could get its tentacles on. However, when the rattle ends up in the water again due to Humdinger's flailing when he panics again, Rocky, to everyone's surprise, offers to dive down and retrieve it with his new Sea Patrol metal detector, willing to get wet and overcome his aquaphobia to help the octopi.
Once Rocky retrieves the rattle, Ryder and Zuma use it to lure the baby off Humdinger's head and back to the water, causing its mother to follow as well. Once a safe distance out at sea on the Sea Patroller, Zuma gives the rattle back to the baby, who is then picked up and hugged by her mother.
Shortly thereafter, Ryder and Zuma arrive back on shore to be congratulated by Goodway and everyone else. However, there's another reason to celebrate: Since Rocky overcame his aquaphobia to help the octopi, he's earned his Sea Patrol lifeguard badge, much to his happiness and that of the other pups, but when Rubble asks if they can eat now, Humdinger points out that the baby octopus ate everything. Luckily, as thanks for saving his ship, Cap'n Turbot arrives with The Flounder loaded with fresh fruit and other food, much to both the pups and Humdinger's gratitude. As for Ryder, Goodway asks about if the octopi could return, but Ryder assures her that if there's another problem that requires the pups in their Sea Patrol gear, just yelp for help. Also, Ryder took care of the mother octopus' sight problem so she won't pose a problem anymore.
It is revealed that Ryder gave the mother octopus a pair of glasses designed just for her so her sight is improved, and she and her baby share another warm hug.