Annie organizes the local kids into the "Junior Commandos" to do homefront war work like collecting scrap and selling war bonds. Annie befriends Mrs. Sleet, a bitter old woman who lost her son and husband in "the last war" (World War I). Doc Zee joins the Army and Annie comes to live with Mrs. Sleet, who she now refers to as "Auntie Priss." A hardbitten refugee boy called Driftwood comes to live in the house. Later Annie uncovers a German Fifth Column operation. A brief cameo of Daddy Warbucks fighting in Asia, then back to Annie and the kids watching a sub attack a ship, whose captain is Annie's old friend Shanghai Peg. Later Annie hears a radio report that Warbucks and his company had been killed in battle. Doc Zee returns from the war, minus an arm.