The Grim Grotto

The children guess the password on the submarine's hull and meet its captain, Widdershins, a member of the secret organisation their parents belonged to who issues orders that contradict one another from one minute to the next. His stepdaughter Fiona is a mycologist, and the cook turns out to be a man the orphans once met at a lumbermill. Klaus reads the tidal charts to work out where the missing sugar bowl must be, while a submarine shaped like an octopus appears on the sonar and something that registers only as a question mark drives it off.

Fiona identifies the fungus growing in the grotto, and the cave is too narrow further in for the boat to pass. Widdershins will not say what the sugar bowl holds, only that it matters more than the children understand. His destination is a hotel, which the crew believe will be the last safe place left to them. The password the children shout across the water is "the world is quiet here", a phrase that recurs elsewhere in the series.