It rains all day, and everyone in the tree house is bored to tears. Peter Pan suggests a game of telling scary stories. Meanwhile, Alf and Robert are caught in the rain, and accidentally discover both the tree house and the secret entrance into it. They are soon hiding behind furniture, getting just as scared of Peter's story as John and the Lost Boys are. Wendy, hoping to scare Peter out of his pants, decides to load the deck and enlists Michael's help in creating a ghostly apparition. Both Peter and Wendy get more than they had bargained for in the end.