Nancy Drew and her friends are plunged into a network of strange events when they visit Misty Lake. The very night they arrive, they meet pretty, red-haired Cecily Curtis, who seeks Nancy's help in solving two mysteries: one concerning Cecily's fiancé, Niko Van Dyke, a popular singer who believes that his record company is cheating him of royalty payments; the other, involving a family treasure hidden before the start of the Civil War - Cecily's only clue being half of a gold locket.
Nancy's investigations lead her to Pudding Stone Lodge, where the sinister Driscoll family lives. Elusive humming noises, a flashing light in the attic of the lodge, the periodic apparition of an excursion launch which had sunk in Misty Lake years ago, and the fleeting appearances of a frightened girl who strongly resembles Cecily give Nancy plenty of opportunity to test her sleuthing skills.
Braving a series of dangerous situations and discouraging developments, the alert young detective perseveres in her attempts to solve both mysteries and reveal the astounding secrets of Pudding Stone Lodge.