Later Albert suggests that they should capture some smugglers by placing a keg of brandy on the beach and getting a witness to see what happens. Dudfoot comes back into the station with a fisherman, who is carrying a keg of brandy and Albert and Harbottle say they haven't taken their keg down to the beach yet, therefore resulting in two kegs of liquor. Albert's girlfriend Emily screams and passes out as she claims to have seen a Headless Horseman. Later Albert spots the Headless Horseman too and after an encounter with him in the Squire's garage, they are scared off by the Horseman, though Harbottle finds a small package which he tucks away. Back at the police station, the Chief Constable phones them about the smuggling and instructs them to find the navigational light the smugglers are using. In spite of the light episode with the coastguard, the three policemen brush off the idea that the coastguard is involved with smuggling. A warning note to keep their noses out of things that are not of their concern is wrapped around a stone thrown in through the police station window. A ticking sound is heard from the package that Harbottle earlier picked up and they find pocket watches inside. Harbottle then recites a rhyme which tells the legend of the Headless Horseman, although he doesn't know the last line, but his father does. So the trio decide to pay him a visit. Harbottle's father reveals the line thus also revealing the place, the Devil's Cave where the smuggling is taking place. The trio investigate the cave, follow a tunnel and discover many barrels of liquor and other things that seemed to belong to Harbottle. They eventually discover that they are in their own cellar. They decide to call the Chief Constable, but are confronted by the Squire who reveals that he is the leader of the smugglers. After a fight in the dark, the smugglers lock the trio in their own cell and escape, deciding to give chase in their car, but since the other police agents think they are smugglers as well, their car is also wanted. After a chase on a bike, a lorry and a London bus, the police agents finally capture the smugglers at Brooklands. The Chief Constable asks the Squire if he has seen him before, but the Squire denies this. Dudfoot then reveals the story of the accident at Harbottle's shop, and the Chief Constable orders that the trio be arrested. Dudfoot punches the Chief Constable and the trio run as fast as they can along the race track away from the other pursuing policemen.