Annie fills in Dr. Clover on the back story on Doc Zee's servant, Katie. Doc Zee, oblivious to the fact that Katie has always loved him since they were neighbors as children, overhears Annie and Dr. Clover discussing the situation. Dr. Clover decides that she must leave and goes to be a combat surgeon for the Allies. Katie's husband, who deserted her years before, is killed in battle, and Doc Zee and Katie get married.; The scene shifts briefly to China, where Daddy Warbucks and his men are rescued from the Japanese and Warbucks assumes command of 200,000 Chinese troops. Back in the United States, a foreign agent pretends to be Malcolm Mitt, a old friend of Warbucks, and invites Annie to travel to his home, a remote castle, hoping to find documents for an explosives formula in Annie's luggage.; Annie goes to Malcolm Mitt's castle. The foreign agents find the papers they are seeking, but decide to send Annie to school in town to ease suspicions about the change in Mitt's personality. Annie finds there's a branch of the Junior Commandos in town and starts working with them.; Annie finds a secret passage in the wall of her room. Another foreign agent, Hans Hurt, comes to visit and to look at the secret formula. Annie assigns the Junior Commandos to shadow Hurt when he leaves the castle. Hurt leaves through the castle door, but returns through a secret passage. Annie wonders whether Malcolm Mitt is really who he says he is.; Convinced that "Malcolm Mitt" is an impostor, Annie decides to explore the secret passage from her room. She finds a torture chamber with the real Malcolm Mitt and others in it. Later she finds another passage that leads to the outside of the castle. Annie cooks up a plan to have the Junior Commandos help her rescue the real Malcolm Mitt.; Doc Zee returns home after losing an arm in the war. He assists a woman doctor, Dr. Clover, in an emergency operation. Later Dr. Clover convinces him to resume his practice with her as his associate.; Annie brings the Junior Commandos into the castle and they use a trap door to catch four of the guards. Annie uses the passage to pretend to be a ghost to scare the false "Malcolm Mitt."; Annie figures out a way to get a bunch of the guards on the trap door at once and drops them into the pit. A Junior Commandos' father comes with a torch to cut the chains off the prisoners. Salts comes to the chamber in the middle of the action, but the real Malcolm Mitt uses his chains to knock him out.