Scooby and Shaggy are walking home from the pizza parlor with a pizza. They decide to eat the pizza on the way home, but Scooby eats the whole pizza. They hear a car and think it might be the mystery machine, but it happens to be a dark sedan and it drops a violin case before driving away. The two go to see what the car dropped and it happens to be a violin case full of money. Scooby holds the money while Shaggy goes to phone the rest of the gang about what he and Scooby just found.
The sedan comes back and Scooby sees a little poodle with a hurt foot and goes over to help the female dog leaving the violin case alone. Scooby turns around and when he turns back, the poodle and the violin case are gone. Shaggy comes back with the rest of the gang and asks Scooby what happened to the violin case. Scooby tells his story, but doesn't know exactly what happened.
Dapne finds a puppet controller on the street near where the hurt dog was. Fred picks it up and it says 'Pietro's Puppets' on the back. They decide that it must be from the local theater, The Strand Theater. They suspect it must be counterfeiters and head to the theater.
When they get to the theater, they see a man with a puppet. They tell him they want to audition for a trained dog act and Scooby does a little tap dance for them. The man says that he can't work there unless he is a puppet. While the man goes to put the puppet away, they find a piece of money in a drawer near Scooby and Shaggy. Fred and Shaggy push the gang out of the door and the rest of the gang doesn't know why and asks about it when they are back in the van. Fred and Shaggy show the others the bill and Velma examines it. Velma says that it's real and they realize that they people didn't want them to think anything was up, so they come back to check it out.
They get back and find the doorman asleep, and they sneak into the theater. As Scooby sneaks past him, the puppet opens it's eye. Shaggy and Scooby are playing around while searching for clues and set backgrounds start falling on the two.
Velma and Daphne are checking out behind the stage when a sandbag falls right next to Velma, almost hitting her. They realize that it didn't fall, but that the rope had actually been cut. Meanwhile, Shaggy and Scooby continue to search for different clues and find a room full of costumes and props. Scooby is sniffing around and Shaggy is poking through different items and they both start trying things on, when Scooby spots a man with the same outfit that Shaggy was
wearing. The two run out of the room scared.
Daphne and Velma are walking across the stage towards Fred when they see a man with a cape in the prompter's box. Scooby and Shaggy appear seconds later and tell the others that they saw the same man that had been in the prompter's box. Fred asks Scooby to go into the prompter's box to see what is down there and Daphne throws a Scooby snack at him and it falls in the prompter's box. All he sees is violin cases. When the gang goes down there all they see is empty violin cases. They all hear the organ playing and look out of the box to see the caped man playing the organ. The lights dim and he disappears.
All of a sudden, puppets start falling from the ceiling and laughing maniacally. Then Scooby sees the girl puppet he had seen earlier and catches it and brings it back to the gang. They find a printing plate for a twenty dollar bill inside the puppet. They go to tell the doorman what is going on, but they can't seem to wake him. They realize he is a puppet too. Shaggy tries to get out of the theater, but it's locked. Velma is holding the plate, when a puppet bird snatches it. They decide they'll have to go back and look around the violin case room, under the prompter's box.
They open a harp case and it happens to be a room. They see a printing press and money lying around the room. They see the caped man and run away. They keep running and see the tunnel they are in is a dead in. There is a ladder at the end, which leads the gang right back to the stage area. Someone steps on the trapdoor from the tunnel, so they all push hard and find the man is gone. Life-size puppets start terrorizing the gang again and they realize they are puppets finally and there must be a puppet master. Scooby sees the puppet master and chases him right into the trap the gang set for him.
They are talking to the policeman about how Mr. Pietro was the true counterfeiter and how the town had been flooded for weeks with phony twenties, when they all see Scooby all dressed up in a cape. The gang laughs and Scooby continues to show off.