Wally Walker and the evil Lady Goff are rivals in the scrap and recycling business. When Specks invents a machine that Lady Goff wants, she and Clott steal it but it doesn't work without the password. Meanwhile, Wally's family have an adventure trying to rescue Specks. Lady Goff won't release them until Specks gives her the password.

Lucy rescues a very smelly old teddy bear from a dustbin in the park. She takes him home and washes him. Now he smells very different. At night during a storm, Lucy lies frightened in bed, hugging Smellybear. Smellybear tells her to jump out of bed and run to the door because something is about to happen!