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As the Carfax sinks, Terry (Ralph Byrd) and Jean (Maxine Doyle) are safe in an air hole. Thorg (Richard Alexander), meanwhile, finds his way back to Boroff (Bela Lugosi), who is blackmailing laboratory owner G.A. Rackerby (John Picorri) into working for him. Terry learns of Rackerby's involvement but upon investigating is captured by two of Boroff's minions (George Chesebro and Roy Barcroft). With Terry as his hostage, the latter escapes in a launch. Not realizing that Terry is on board, the coast guard attacks the fleeing boat and blows it to kingdom come.