A squid man, Char Gar Gothakon is terrorising Darrow University. The gang all are at the University, so battle the Monster, but it escapes. Velma attents her meeting with Harlon Ellison, a famous book writer, who taunts Howard E Roberts, a fan of H.P. Hatecraft, Harlons rival. Fred agrees to solve the mystery, but the don't want to.
After a long day, the gang explore Hatecrafts mansion. Char Gar Gothakin almost kills Hatecraft, until the beast is caught and is Howard beacuse he wanted to devotion to the myths written by Hatecraft. The gang 'discovers the whole history of Crystal Cove' in the back of their van. The history was only a chest of Crystal Cove History. Who put it there....?