On behalf of the Phoenix Foundation, MacGyver and Pete are using a model submarine in a water tank to test ERMA (Echo Regeneration Module Active), an anti-sonar system. The system's creator, Gwen Carpenter, is supervising the experiment. Dan Stringer, the DEA agent in charge of interdiction, arrives and explains that the major drug cartels have equipped their ships with sonar. The DEA hopes that ERMA will let them bypass the Cartels' sonar. The test is successful and Stringer insists that Gwen may have changed the course of the war on drugs.
At Shark Submarines, Inc., owner Nick Landis is meeting with drug lord Sanchez and promising he can deliver subs that can get past the DEA, and offers a demonstration the next day.
Pete confirms with Stringer that they'll be doing a full-water test with the Navy the next day. Gwen has a gourmet dinner planned for that night but Pete asks her to stay. She tells him that he'll have to find someone else and leaves. They both figure that Gwen is love, and MacGyver makes a hasty exist before Pete can stick him with the report. At her apartment, Gwen meets with her new boyfriend and talks about how the DEA will be giving a full-water test to her project the next day. She promises him she'll have a lot of free time the next day. He wishes her a happy six-month anniversary and Gwen admits she didn't think she could love someone again after the death of her husband.
The next morning, Pete arrives as the delivery team takes out ERMA to the submarine pier. They're unaware that Landis' man Banniker is monitoring the situation and tells his man Donnelly to be ready. Banniker then follows the van and closes in as Donnelly takes out the van's tire with a gunshot.
Gwen, MacGyver, and Stringer arrive at the test site but Pete tells them that hijackers took the ERMA unit.
Donnelly delivers the ERMA unit to Landis. However, Donnelly warns that the highway patrol spotted them. Banniker drove off to let Donnelly escape, but he was captured.
Gwen tries to call Landis without success.
At Foundation, Stringer tells Pete and MacGyver that Banniker was a computer hacker who served a three-year sentence, but his lawyer got to him before the DEA could interrogate him. Pete reveals that he hijackers didn't get the operations disk that allows the use of ERMA. They figure Banniker was the one the Cartel intended to hire to decipher the disk. MacGyver gets an idea and reminds Pete of Dexter Filmore, then asks Stringer to hold Banniker without bail. MacGyver then sets it up so he's put in a holding cell with Banniker, and a newspaper article is placed saying Dexter has recently been arrested for computer hacking. Banniker approaches MacGyver and they exchange mutual congratulations.
Landis and Donnelly realize the ERMA is useless without the operations disk. Donnelly warns that Gwen will figure things out and Landis knows that Gwen has left messages and probably figured something is up. He calls Gwen and says he's in big trouble and asks her to come down to the factory.
MacGyver and Banniker are discussing past computer hacks, and MacGyver pretends to get claustrophobic. He admits he has no money and Banniker offers to get him out in return for MacGyver helping Landis cracking the security codes on the operating disk. MacGyver quickly agrees.
Gwen arrives at the factory and Donnelly draws a gun on her. Landis pretends to be a prisoner as well and claims that he initially tried to set up Gwen but fell in love with her. Donnelly tells her to decode the ERMA system or he'll call Landis. Landis begs her to help to save his life.
MacGyver calls Pete to tell him that Banniker's lawyer has bailed him out but he hasn't found out who he's working for yet. Pete says it's too dangerous and MacGyver was only supposed to get information. MacGyver is forced to hang up when Donnelly arrives to pick him up. Meanwhile, Stringer tells Pete that Gwen is the leak: she used her security card to gain access to the operations disk. Stringer goes to get a warrant and search Gwen's place.
Donnelly delivers MacGyver to Shark Submarines and Landis promises to make it worth his while.
Stringer and Pete search Gwen's apartment and Pete spots a photo of her with Landis.
Landis puts pressure on MacGyver to decrypt the operations disk by 4 that afternoon for a demonstration. MacGyver warns he'll need to write a password-cracking program but he can do it in two hours. Gwen comes in, sees Landis working casually with Donnelly and MacGyver, and calls MacGyver by name when she sees him. Landis realizes it's a set up . Landis threatens MacGyver to get Gwen to give him the password. They haul MacGyver out, dropping his glasses.
Pete has been going over Gwen's correspondence with Landis and Stringer prepares to run his photo through the FBI files.
Donnelly locks MacGyver in a submarine and then open the valves. The sub starts to sink but Donnelly stops it halfway and tells Gwen to give him the password. When she refuses, Landis has the crane operator lower it to the bottom of a test tank. Gwen finally gives in and Landis says he'll release MacGyver once she demonstrates ERMA to his buyers. They leave and MacGyver comes up with a plan to escape.
Pete finds a pen from Shark Submarines and realizes Landis is the owner. They find his address in Gwen's address book and Pete goes to the factory while Stringer checks out Landis' home address.
Landis tells his man Crocker to drown MacGyver and meet them at the pier. Meanwhile, MacGyver takes a signal flare pistol and ties it to the ladder, pointing up to the hatch. The submarine starts to fill with water again and as the level raises, MacGyver finishes rigging the flare pistol and uses an oxygen tank to supplement his air supply. Pete arrives at the factory as MacGyver pulls the wire... which slips off the trigger. MacGyver rerigs the wire goes back under, and fires the pistol. Pete sees the explosion and goes to investigate, and finds MacGyver swimming to the surface. They check Landis' desk and find a reference to a boat, the Windward Isle
, at Pier 9.
Pete and MacGyver arrive at the dock and see Landis and his men loading the boat. MacGyver tells Pete to call for help while he stalls. Meanwhile, Landis tells Gwen to explain the system to Gwen, but she's less than reassuring. Outside, MacGyver sneaks on board and spots Gwen. She sees him outside and he gives her a signal. he then garbs an inflatable life raft, goes into the cabin, pulls Gwen out, and inflates the life raft, trapping Sanchez and his man. On the deck, MacGyver grabs a life jacket and sneaks up Crocker as he casts off, and then immobilizes him by putting on the life jacket. MacGyver knocks him out and then reties the boat to the pier. When Landis pulls out, they're forced to stop and Donnelly goes to investigate. He discovers the unconscious Crocker, and MacGyver hooks a line from a crane to Donnelly and lifts him up in the air. Landis sees MacGyver and opens fire. Gwen grabs a pipe and knocks him out.
Later, Pete checks and learns that the DA's office has dropped all charges against Gwen. The Phoenix Foundation has released her but MacGyver figures she'll be fine and Stringer promises to make sure she gets credit for the DEA's first successful indictment using ERMA.