The Queen has finished her royal tea and it's two more hours till bedtime so she suggests a hunt for ghosties. She and Peter-the-Page are the only ones who believe they exist as they all race through the Royal Palace looking for them. Pompous Sergeant Rock Hard of Her Majesty's Guard teases the other characters for being cowardly and pretends to be very brave, but when they get to the tower, he turns out to be the cowardliest custard of them all. He runs away screaming, thinking he's seen a ghostie, and the other characters bring him cocoa in bed, explaining it was only a tiny bat. The Queen and Peter the Page stay behind in the tower to play with the ghosties, who had been following them all along.