MacGyver, Pete, and Phoenix scientist Gwen Carpenter are using a water test and a model submarine to test ERMA, an anti-sonar system. Gwen has created the system and they want to offer it to the DEA to interdict Colombian drug lords who have used their riches to buy expensive sonar equipment. DEA agent Dan Stringer arrives for the demonstration, which proves a success.
Nick Landis, owner of Shark Submarines, meets with leading drug lord Sanchez and promises that he can provide a submarine that can get past the DEA sonar.
Stringer asks the foundation to provide a full-water test with the Navy the next day. Pete asks Gwen to stay to prepare for the test but she says she has a gourmet dinner with her new boyfriend Nick. She leaves and MacGyver follows her lead before he gets stuck doing the report.
That night, Gwen meets with her new boyfriend: Nick Landis. She talks about the next days' full-water test and promises that she'll have more time for him after the tests done. Landis wishes her a happy six-month anniversary and Gwen admits she didn't think that she could be with another man since her husband's death, but Nick has brought her new hope.
The next morning, Pete meets with the Phoenix delivery team as they prepare to deliver ERMA to the Navy docks. As they leave, Landis' man Banniker watches and then calls his man Donnelly. Banniker follows the delivery van on his motorcycle and closes in from the rear as Donnelly uses a rifle to take out the van's tires.
MacGyver and Gwen meet with Stringer at the Navy test site. Pete arrives to tell them that hijackers have taken the ERMA unit.
Donnelly takes the ERMA to the submarine company and tells Landis that Banniker was captured when the highway patrol spotted him.
Realizing only someone on the inside could have known the van's route, and she's one of the few who would know, Gwen tries to call Landis.
Stringer meets with MacGyver and Pete at the foundation and reveals that a background check shows that Banniker is a computer hacker with a prison term on his record. His lawyers got to him before the DEA could get anything out of the hijacker. Pete explains that while the hijackers have ERMA, they don't have the operations disk, which was transported separately. They figure whoever hijacked ERMA was going to have Banniker hack the system, and now they'll need to hire a new hacker. MacGyver suggests that he go in disguised as Dexter Filmore, computer geek, and get put in Banniker's cell.
The DEA runs a fake story on Dexter's arrest in a newspaper and plants it in Banniker's holding cell. MacGyver arrives and "recognizes" Banniker, who congratulates him on his recent hack job.
Landis and Donnelly discover the operations disk is missing, and that Gwen has been trying to call Landis. Landis figures she knows he's involved and calls her, asking her to come to the factory.
As MacGyver and Banniker talk, MacGyver fakes claustrophobia and admits he's broke and can't make bail. Banniker offers to have his people get MacGyver out of jail in return for his doing a hack for them. MacGyver agrees, although Banniker refuses to say who his employers are.
When Gwen arrives at the factory, Donnelly and Landis fake that Landis is a prisoner. Donnelly takes her prisoner as well and Landis claims that he was hired to seduce her but ended up falling love with her. Donnelly tells her to provide the operation codes or he'll kill Landis.
MacGyver calls Pete from prison to tell him what's going on. Pete warns that the plan was for MacGyver to get the information from Banniker, not go to work for his employer. MacGyver has to hang up when Donnelly arrives to pick him up. As Pete wonders what to do next, Stringer arrives to tell him that they've discovered that Gwen's security card was used to gain access to the operations disk. They figure she's the traitor and get a search warrant to go through Gwen's apartment. They find a photo of her with Landis and go through her correspondence. They only have Landis' first name to go on, but find a pen with the Shark Submarines logo on it. They figure Landis is involved and Pete goes to the factory while Stringer prepares to search Landis' home address.
MacGyver arrives at the factory and agrees to break the encryption. He tries to stall but Gwen comes in. She realizes that Landis is working for Donnelly and the entire thing is a set up. Worse, she recognizes MacGyver and blurts out his name. Landis realizes who MacGyver is from Gwen's descriptions of her fellow workers and forces Gwen to provide the code by threatening MacGyver. He locks MacGyver in a leaky submarine and has his man Crocker lower it into a water tank. Gwen finally gives in and Landis tells her he'll release MacGyver once the drug lords are satisfied with the ERMA system. As they go, Landis tells Crocker to fully submerge the submarine.
With his air running out, MacGyver finds a flare pistol and ties it to the hatch ladder. He uses an oxygen tank to supply enough air to survive long enough to fire the flare, blasting open the hatch. Pete arrives and they search Landis' desk, finding a reference to his boat, the Windward Isle, docked at Pier 9.
MacGyver and Pete get to the dock and confirm that Landis is preparing to leave. Pete goes to call Stringer while MacGyver sneaks on board the ship. Meanwhile, Landis tells Gwen to explain ERMA to Sanchez and leaves her with the drug lord. She lies about the system's reliability. MacGyver spots her and breaks in, tossing an inflatable life raft at Sanchez and activating the inflation valve. The inflating raft jams Sanchez and his man in the cabin. Outside, MacGyver uses a life jacket to straitjacket Crocker and then knock him out. He reties the boat to the pier and when it stalls on the way out, Donnelly goes back to investigate. MacGyver hoists him up into the air on a winch but Landis spots him. The crooked manufacturer opens fire but Gwen knocks him out from behind.
Later, Pete confirms that the DA's office has dropped all charges against her. The Phoenix board has no choice but to fire her, but MacGyver figures she'll be fine. Stringer tells them that they have successfully captured the first drug smuggling ship using ERMA.