While attending a matinee performance at a Gotham City Theater, The Penguin, with the aid of his trusty bulletproof umbrella, foils a would-be thief who attempts to steal beautiful actress Sophia Starr's great ruby. The forces of good suspect that this is a plot, but Penguin insists upon his good intentions. Later, at The Millionaire's Club, Penguin once again prevents a crime, this time fending off two crooks (actually Eagle-Eye and Dove, Penguin's Finks!) from kidnapping millionaire Reggie Rich from a steam-room. The Dynamic Duo finally show up, and Penguin announces his Penguin Protection Agency, intended to protect the wealth of Gotham City's society crowd (and as actual competition for Batman and Robin!), including Sophia Starr's Jewelry. In an attempt to prevent The Abominable Avian from swiping Sophia Starr's jewels, The Caped Crusader has Alfred the butler pose as an insurance company agent and sends him on a secret errand to photograph the jewelry, and switch Penguin's cigarette holder for one containing a hidden microphone. Unfortunately, Alfred didn't count on Penguin's bug-detecting handle of his umbrella, and when he discovers the switch, Alf manages to yank the rug out from under Penguin and escape with the photos.
That night, after using Alfred's pictures to create phony jewels to replace the real ones, which Penguin has been hired to protect, The Darknight Detectives break into Miss Starr's apartment in order to replace the real jewels with the fakes. Unfortunately, they are caught trying to make the switch and are charged with burglary by The Felonious Fowl and his Finks. The Caped Crusader and The Boy Wonder escape, but are now labeled fugitives from justice! When The Penguin throws a party at The Gotham Amusement Pier, The Dynamic Duo arrives to investigate, but quickly fall into a Penguin trap and are pelted with cement-filled an umbrella! They are strung up behind the balloon-shooting gallery, and the pop guns (wielded by an unknowing Commissioner Gordon and Chief O'Hara) are loaded with real bullets!