The gang attends the Royal Knights Faire in Crystal Cove, but so does an unexpected guest. A scary-looking gnome is paralyzing everyone wearing pirate costumes at the Faire. As the gnome had claimed many victims (to the point where the hospital had no room for any more of them), the overflow is sent to the local movie theater. It is here, as Fred is getting a test sample from a victim, that Velma tells Daphne that she and Shaggy are dating. Shaggy and Scooby-Doo eventually encounter the gnome while watching one of the "noblemen". During the chase, Shaggy trips, leaving him to be caught by the gnome as he tells Scooby to get the others. Scooby goes to find the others. The gang gets a call from Mr. E. Velma gets mad when Mr. E says he cannot tell where Shaggy is, but for them to go to where he last disappeared. In the forest where Shaggy was last seen, they find a hollow tree that leads to a traveling system for the gnome. There, they find Shaggy. After being caught in Fred's trap, the monster is then revealed to be the jester Gil Littlefoot who wanted his wife Amanda's money by framing her for the gnome attack on those that dressed up as pirates. Sheriff Stone takes Gil away as Mayor Jones stated that he had plans for that gnome. Then a fully-cloaked person bumps into Velma and drops a box sent by Mr. E. In it is a note saying "Don't give up. It has all happened before." Then she finds another sheet of paper in there. It is a picture of the former Mystery Incorporated with their mascot Professor Pericles circled in red.