During the summer vacation, the group meets Daphne’s uncle, Thornton “Thorny” Blake V, who offers them summer jobs to pay back damages from a previous mystery at his country club in Erie Point. However, their peaceful plans are disrupted by a frog monster attacking during the club’s opening party.
They start investigating lighthouse keeper Elmer Uggins, the only person with a picture of the lake monster. Uggins reveals the dark history of the lake monster, which involves the witch Wanda Grubwort and her magical staff’s curse on the villagers.
Velma discovers security footage showing the lake monster meeting a mysterious figure on the beach, but the footage gets destroyed. Meanwhile, tensions rise among the group as Fred and Daphne drift apart, Shaggy’s feelings for Velma cause misunderstandings, and Scooby feels ignored.
As the group delves deeper into the mystery, they uncover Velma’s possession by Wanda’s spirit. Their infighting had blinded them to the signs of Velma’s possession, leading to a dangerous showdown in the underwater caves.
Through Shaggy’s heartfelt singing, Velma breaks free from Wanda’s grip, saving the day. Wanda’s defeat and the destruction of her staff restore peace to Erie Point. The group learns valuable lessons about friendship and acceptance, leading to their decision to remain a team named Mystery Inc.
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