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After weeks of not solving a single mystery, the gang is sent a package from Mr. E. The package contains a new handbag made in Gatorsburg, claiming to be "real 100% gator". As Velma explains, this could not be possible since the "gator mines" dried up years ago. Fred decides that they should go to Gatorsburg to investigate. Upon arriving, Velma becomes angry with Shaggy for not telling Scooby about their relationship. They can never be alone because of Shaggy's fear of how Scooby will react. When the gang regroups, having found no clues; they decide to leave. Unfortunately the Mystery Machine's engine is missing. A mechanic named Grady Gator arrives and tells them that they are stuck in Gatorsburg and a new engine will not arrive until morning. The gang attempts to call their parents and pick them up, but they cannot for various reasons. Looking for a place to stay, Grady tells them they can stay at his sister Greta's hotel and warns them to not leave their rooms. Greta and her son Gunther bring them to their rooms. Greta puts the boys and girls in separate rooms. She makes it very clear that no one is to leave their room. Since pets are not allowed, Scooby is forced to sleep in the Mystery Machine. Velma almost immediately violates the rules by leaving her room to go see Shaggy. Shaggy, feeling worried about Scooby, leaves to go check on him and runs into Velma. He lies and says he was coming to see her. Meanwhile, Scooby is attacked by three Gator People. He runs into Fred's room where Fred was showing a bored Daphne a scrapbook of all the traps they've used to solve mysteries. The Gators attack them but they are able to escape. Velma and Shaggy are about to kiss when they are they are interrupted by the rest of the gang bursting into the room. Everyone runs and leaves Gatorsburg by pushing the Mystery Machine. The Alligator People stop chasing them once they reach the city limits. Fred realizes they just wanted them out of town. They sneak back in and see the Alligator People loading Alligator Products onto a boat. Daphne (who is allergic to fake animal skin) shows the guys the products are actually fake. By using a trap, they catch the criminals. The police arrive, and it is revealed that the Gator People are really the Gator family, who made fake gator products to make money and assumed the disguises of the Gator People to scare away visitors. Sheriff Stone was disatisfied with buying an imitiation alligator skin coat and orders his men arrest the Gator Family even though they have no jurisdiction in Gatorsburg. The gang finds the Mystery Machine with the engine replaced and a note from Mr. E telling them that this mystery is only "one piece of the puzzle". As it begins to thunder, Scooby jumps into Shaggy's arms. Shaggy and Velma smile as Shaggy holds Velma's hand.