
Lillie Lightship is sad. Moored out of the harbour to guide boats and keep them out of danger, she never gets to see the Regatta. In spite of Lillie's warnings, a tramper sees her too late and hits her, making a large hole in her side. The Star tugs rescue her and she is towed into the yard to be mended, from where she sees the exciting, colourful regatta parade, with barges decorated by dockland firms, cranes, and buildings festooned with banners.
It is the 1920's: Rival tug fleets compete for work in Bigg City Port. Captain Star briefs his Star Tugs - he's trying the regular contract to dock The Duchess ocean liner. It'll be a difficult job but to help out, the captain has recruited Sunshine, a small switcher. The rival Z-Stacks are encouraged by their devious Captain Zero to sabotage the operation. Their leader Zorran runs Big Mac aground, and nudges Sunshine into The Duchess's bow, swinging her dangerously. Captain Star orders Sunshine's dismissal, but he runs away, and is lost in the harbour in a thick fog.
Ten Cents delivers his last cargo barge to the Old Quay after a very busy day. As night falls, it is towed away by a mysterious boat. Captain Star is cross to hear that one of his customer's deliveries is missing and puts Ten Cents on dredger detail - not a pleasant task. But Grampus, a small submarine, sees another barge being stolen at night, so Captain Star and Captain Zero join forces to find the thief....