Buffalo Bob wants to read to the peanut gallery but picks the wrong book: a scary story. Bob and the peanuts sing "Believe You Are the Best" and learn how to make believe.
Investigator John K. Fadoozle is hired to find the Phantom. Flub-a-Dub and some of the peanuts help Fletcher the Sketcher draw the Phantom's picture. Howdy offers a Medal of Honor to anyone who can help catch the Phantom.
All the missing things mysteriously return, and they're all fixed. Everyone thinks the Phantom is really a hero.
Dilly's wagon is found but with the wrong wheel, Fletcher's easel is broken and Bob and the peanut gallery try to help Myron feel better about himself with a big round of applause.
Bob and the peanut gallery learn how to make a trap for the Phantom.
Buffalo Bob, Howdy, Happy Harmony, Clarabell, all the Doodyville characters and the peanut gallery are excited to begin the art festival. First prize will be the masterpiece by the great artist Vincent van Schmeer, who will judge the fest.
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