Uncle Traveling Matt sends a postcard to the Fraggles in which he describes taking a vacation, which the Fraggles have never heard of before. They decide to take a vacation themselves, going to Craggle Lagoon - the home of the Fraggle-like Craggles. There, they discover that all the water has disappeared from the Lagoon. Red, turning into her Inspector Red persona, attempts to find the reason for the disappearing water. She meets Lyle, the leader of the Craggles, and the two encounter the giant, insect-like Mantivore, who explains that the disappearing water is the Fraggles' fault. The Fraggles then help the Craggles find a new place to live.
Meanwhile, Doc and Sprocket take their own "vacation" without actually going anywhere. The Doozers try to find a way to use the mysterious pink goo that Cotterpin discovered. Junior Gorg looks for the perfect place to sun his plant.
This episode contains examples of:
- Actually, I Am Him: A variant happens with Lyle Craggle, who offers to take Red to see the town leader. He walks with her a few feet, then stops and calmly informs her that it's him.
- Chekhov's Gun: Red's hair ribbon, which she lost in the pilot episode, turns up again in this episode revealing that the Fraggles are responsible for the loss of the Craggles' water.
- Continuity Nod: The episode is a reference to the original series episode "Inspector Red", in which Red also turned into a detective to discover the reason behind something going missing. The same song is even used in both episodes!
- Epic Fail: The Fraggle Rock fire department mistook Boober making soup for a fire. And it was a cold soup.
