In San Francisco on Chinese New Year, Jim and Jeremy go to Quen Yung’s restaurant. They’ve received a note to be there at 11 p.m. so that a woman can give them information on Din Chang. The agents go inside and ask for Table 7. After a moment, the waiter takes them there and offers them a plate of fortune cookies. Jeremy realizes that all of the fortunes say the same thing, and they all say that Quay will point to Chang. Quay is the most powerful of Chinese witches and wears a mask of evil to hide her face.
Jim spots a woman wearing just such a mask, and the agents watch as waiters carry a screen by her and go outside. When they pass, the woman is on the floor, dying. Jeremy checks on her while Jim runs after the waiters. Three thugs are waiting and jump him, but Jim disposes of them and hauls one of them inside. Jim takes the man inside where the woman speaks a single word—“Pelican”—and then dies.
The agents summon the police, who take away the body and the captive thug. Lieutenant Tom Bengston is in charge and Jim, an old friend, introduces him to Jeremy. The agents explain that they’re after Chang, who knocked over a government storage depot. No one in the restaurant is talking and they haven’t identified the dead woman. Bengston does know the thug, Johnny Dirk, but Jeremy points out that Johnny is supposed to be serving time in Alcatraz. They demand answers from Johnny but he refuses to say anything. As they take him away, Jim explains that Chang took ten barrels of fulminated mercury: enough to blow up half the city. The only things the dead woman had on her were a puppeteer’s control rod and a serpent ring. Bengston lets the agents keep them and leaves to interrogate Johnny.
Back at the Wanderer
, the agents go over what they have and try to work out how Chang is connected to “pelican.” Amy Stafford, who works with Colonel Blake in San Francisco, arrives to tell them that Colonel Kelton Morse, the commandant at Alcatraz, has responded to their inquiry and confirmed that Johnny is supposedly confined. The agents wonder why Morse would lie to them and Jim realizes that Alcatraz is Spanish for “Pelican.” They figure that Chang is tied to Alcatraz, but Amy warns that they’re not going to want the Secret Service walking there.
Some time later, a new group of prisoners is brought in. Corporal Simon greets them and explains the rules. Among the prisoners is Jim, and Simon pegs him as a troublemaker. Jim attacks him and the guards quickly restrain him and haul him away.
Jeremy goes to Ah Fung’s Puppet Theater, disguised as a Chinese man. He tries to find someone who recognizes the serpent ring but has no success.
Jim is taken to Major Frederick Frey, the adjutant, who is impressed that Jim knocked Simon out. He feigns shock and accuses Jim of lying about Simon attacking him. Frey goes over Jim’s fake file, which says that he’s a private who has deserted and assaulted a senior officer. Jim notices the door to Morse’s office and Simon storms out and swings at Jim again. Jim tackles him back into Morse’s office and gets a brief glimpse of the man before the guards take him away. Frey then tells Morse to continue signing papers or he’ll be sent back to solitary.
Simon takes Jim outside into the parade ground and has him move the 42-pound cannonballs across the yard. Jim slowly carries them.
Jeremy finds an ancient puppeteer and asks if he has an assistant, and the puppeteer angrily says that he travels alone.
Jim finally finishes carrying cannonballs and Simon has him move them back to where they were. Jim drops one and lets it roll toward a bunker door where a prisoner is taking a sack in.
The disguised Jeremy finds Jasmine Blood’s Chinese Puppets and the poster shows the dead woman from the restaurant. The agent goes inside and watches the performance, which involves a Hindu prince fighting a Chinese dragon. Once the show is over and everyone else leaves, the curtain opens and the unseen puppeteer tells Jeremy that the performance is over. Jeremy compliments the performer and the puppets, refusing to leave despite the puppeteer insisting. The agent comments about someone dying ignobly and a female puppeteer takes over, asking who he is and what he has to do with her sister’s death. They ask if he is a murderer and the male puppeteer comes out with a sword, and Jeremy puts the serpent ring on it. Both puppeteers come out and Jeremy asks them if they can tell him anything about Chang. They leave without saying anything and the last unseen puppeteer performs as the dragon. He tells Jeremy to seek out Jean-Paul, Chang’s friend, and directs him to a warehouse. Once the agent leaves, Jasmine’s sister looks nervously after him.
The next morning, Jim finishes stacking the cannonballs again and Simon assures him that they’re perfect where they are. However, he tells him to rearrange them and laughs, and Jim punches him. Another guard knocks him down and dumps the cannonballs on him. Jim is taken to the infirmary where Dr. Sara Gibson looks after his injuries. She’s surprised that he’s still alive and explains that she has the technical rank of a captain. Sara knows all about him, having read his fake military file, and points out that while he was unconscious and feverish, he kept muttering the names “Quay” and “Chang.” Jim asks her about the bunker door and Sara says that she’s never seen a prisoner come out. Simon storms in without warning and presents an order putting Jim into solitary confinement. Sara refuses to release Jim, insisting that he’s unfit for duty, but Simon overrides her. The guards shove Jim off the door and he fights back until Simon draws a gun on him and says that he’s going to the bunker... just as Jim planned.
On the docks, Jeremy poses as a sailor and approaches the warehouse. The agent sneaks up near the guards and screws a screw into the side of a crate containing bells. He then uses a miniature blowtorch to cut a circle and uses the screw as a handle to remove the piece. He then plants some fireworks inside the crate and lights them with a delayed fuse. When the guards come to investigate the racket, Jeremy enters the warehouse and follows voices. Jean-Paul is meeting with a sergeant from Alcatraz who relays a message from Chang demanding the merchandise. The Frenchman assures him that the merchandise will ship soon.
Jeremy goes out and hears banging noise, and sees a crate of uniforms marked for delivery to Alcatraz. However, it contains Chinese rockets. When the workers come over, Jeremy crawls into the box and pulls the lid close, and the workers arrive and nail it shut.
The next day, Simon has his men take Jim to the bunker and tells the agent that he won’t be seeing sunshine again. There is a large armory below, including the cases of fulminated mercury. A guard almost knocks over one barrel and Jim catches it, warning what would happen if it suffers a sharp contact. Chang is there and impressed with Jim’s knowledge of explosives. He points out the rockets, pointing out of a hole in the wall facing out to San Francisco Bay, and boasts of China’s expertise in rocket design. The one thing they lack is a timing charge, but now he has the fulminated mercury. Chang invites Jim to deduce what he’s doing and Jim concludes that Chang plans to bottle up shipping and terrorize the mainland until they pay what he wants. Jim offers to work for him but Chang says that he has enough men and orders his men to take the agent away. Jean-Paul comes in and Chang has him make sure the rockets are properly stationed.
The crate containing Jeremy is delivered to the armory and a guard opens it. Jeremy feigns unconsciousness until the guard takes a rigged box from the agent and the gas inside knocks him out. The agent then takes his uniform and finds Jim with the other prisoners, hauling crates. Jeremy tries to bluff the supervising guard into letting him take over, and when that doesn’t work Jim knocks the man out. The agents compare notes and Jeremy goes to find the real guards while Jim heads upstairs.
Sara is waiting for Frey in his office and looks curiously at Morse’s office door. Frey comes in and Sara asks to see Morse. The major says that he’s the acting commandant since Morse has been called to the Presidio on urgent business. When he wonders what she wants, Sara says that she never sees any prisoners emerge from the bunker. Frey insists that they’ve been transferred to the mainland, and Sara asks about the name Chang that Jim kept repeating. The major confirms that Jim mentioned a Chinese name and then removes his disguise, revealing that he is actually Chang. Chang picks up a knife and points out that he is an expert with a blade.
Before he can dispose of her, Jim crashes through the door and captures Chang, and then tells him to help destroy the rockets. Chang agrees but triggers a secret signal, alerting Simon and his men. They come in with Jean-Paul, who figures that Jim is a government agent. He tells Jim that in 28 minutes, they’ll sink the U.S. fleet with Chang’s rockets as they return from maneuvers. Alcatraz is in the perfect position to target any arriving or departing ship. Jim wonders what they plan to achieve since they can be bombed or starved out, but Chang refuses to answer and tells Simon to take Jim and Sara out to be shot while he goes to the bunker with Jean-Paul.
On the parade ground, the fake soldiers position Jim and Sara against a wall. As the men aim, Jeremy runs out with a box and tells Simon that he got word from Chang that they’re to take the prisoners back to the infirmary. As Sara unties Jim, the distracted Simon tells Jeremy to get out of the way and drop the box. Jeremy does so and the box explodes, releasing a cloud of knockout gas. Jim gets Sara out of the way and Jeremy tells them that the real guards are in the dungeon. Sara tells the agents that there’s a hidden boat and they can use it to get the real guards to the mainland. Jeremy and Sara go to find the imprisoned guards while Jim goes after the rocket launchers.
Chang tells his men to fire when the fleet is in range and then goes to the tower to watch. The men fire the first rocket, sinking the lead ship. Jim breaks in and takes on the men, stuns them, and knocks over a barrel of gunpowder. He runs out as a stray flame from a broken lamp hits the gunpowder, setting it off. Jim then finds plans revealing that Chang plans to land at the Presidio. He spots some grenades, takes them, and runs off.
Jean-Paul and Chang prepare to leave on the hidden boat and spot Jim as he approaches them. They fire at him with a mortar and Jim tosses a grenade into the boat, forcing the two criminals to dive over the side. As they swim off, Jeremy and Sara arrive and Jim assures them that the two crooks will be recaptured eventually.
Later at the Wanderer
, Jeremy and Jim meet with their dates and explain that Chang planned to tie up the fleet so he and his men could land at the Presidio and rob a major payroll shipment. The women notice that Jim is distracted, and he explains that he was thinking about his other partner and is worried that he’s enjoying himself. Jeremy says that Artie received a package with a phonograph record and the women ask him to play it. The message is from Artie’s assistant, who laughingly explains that Artie has been too busy working to contact them and may be staying over for some time. Well aware of what Artie is up to, the agents take their dates to dinner.