It is Halloween night and Olive is reading ghost stories to Popeye and Bluto. Both of the men want to have alone time with Olive, with Popeye wondering why Bluto hasn't gone home and Bluto wondering what to do to get rid of Popeye. Bluto decides to stage various pranks (a headless man, an animated skeleton, and a sheet-over-balloon ghost) to scare Olive and Popeye. He pins the blame on Popeye, Olive kicks him out of her house, and Bluto goes to comfort her.
Popeye gets back at Bluto by going into Olive's bedroom through her window (which was still open) and uses a jar of vanishing cream to make himself invisible. He scares both Olive and Bluto (mainly Bluto), and Bluto eventually runs out of Olive's house. Popeye reveals himself and Olive kisses him for saving her, getting red lipstick all over Popeye's face. Popeye turns to the audience and says, "Loves them ghosts."