Cindy, her little brother Neil, and her mom must moved to Spooksville to live in her father's old family home after he died. When she and her brother take a walk, Neil ends up running towards the creepy lighthouse on the outskirts of town. There are a bunch of local legends that say it's haunted, but she hasn't lived there long enough to believe in them.
Neil takes off for the lighthouse, and she hears a strange noise. A sudden wind whips up right beside the building on the water. Cindy swears that she sees the ghost of an older woman grab her brother and drag him out over the water. Just as quickly as she sees it, her brother disappears.
Adam, Sally, and Watch meet for breakfast at the doughnut shop, and Sally brings up the case. The cops think that her brother fell in the water and accidentally drowned. Watch thinks it may have really been a ghost. When he says that Cindy is cute, Adam agrees to go over to her house and talk to her about what she saw. Cindy sticks to the same story, which leaves the group to check out the lighthouse for themselves.
They somehow gain access to the building, get lost inside, and scare the crap out of themselves before escaping. Watch notices that the light on top suddenly starts working again, which is odd because (a) the building has no power and (b) the electrical lines are shot. They then head to the library and find that a shipwreck happened right off the coast after a power failure and that the son of the lighthouse keeper died the next day when a wave swept him away.
This leaves them to believe that the captain of the ship now abducts kids, despite Cindy seeing an older woman. They go back with a bunch of scuba diving equipment, and both Watch and Adam, who has absolutely no experience, go diving. Watch vanishes, and Adam decides to explore the shipwreck. He runs out of oxygen, finds a room filled with air, and a skeleton comes after him.
Watch goes back up and without any tact, tells the girls that Adam is clearly dead because he didn't have any air left. They agree to go get a new tank and go after him. The skeleton was actually just falling over and not attacking Adam, and Watch finds him without any problems. He even brought him a new air tank so they could escape.
They decide to go back to the lighthouse and look for Neil in a hidden room they noticed at the last moment. Instead of finding Neil, they find the skeleton of an older woman who was the last lighthouse keeper and the mother of the little boy who died. Her skeleton comes to life and attacks them.
Sally and Watch run away to check for some...I honestly don't know. All that matters is that the light from the lighthouse keep shining in their eyes and when they try to break it, it breaks the chair they throw at it instead. They all wind up back in the same room with the skeleton that it attacking Cindy, and they can hear Neil above them.
Let's make this quick. They all realize that the lighthouse keeper has the same last name as Cindy. Her dad was the little boy who "died." He got swept out to sea, somehow survived days in the ocean, was found and eventually adopted by another family. He came back to town to get his mother's former home, which is where Cindy and her family now live.
Adam tells the skeleton what happened. She and Cindy have a weird bonding moment where they hug, and she tells her grandmother about how much she misses her dad too. They get back Neil and find out that the lighthouse is on fire. Watch decided that blowing up the generator was the only way to turn off the light, and the fire from that explosion sweeps through the building. They jump from the top into the water, and I guess everything is okay until the next book.
*While all the other kids drink milk with their doughnuts, Sally drinks coffee with sugar because she says that she needs the caffeine.
*She also makes Adam feel bad that he doesn't have a girlfriend at twelve and tells him that if he waits any longer, he may as well let his life pass him by. If he still doesn't have one at fifteen, he'll never have one. Eek.
*She's also extremely picky. They go to see Cindy, who is still upset over her brother being missing, and Sally demands a can of ginger ale in a green can, chilled but not too cold. Here's an idea brat, go get it yourself!
*The local librarian is more than a little weird. He wears old-fashioned three piece suits, makes the kids drink milk, takes x-rays of their bones, and sometimes locks kids in various rooms. I think he may be a vampire.
*The only reason they didn't make a connection between the two names is that there was one letter different.
*I don't even know what to say about this one! How is her father's name the same if another family adopted him? Why didn't he ever go back to town and tell people he wasn't dead? Did he fake having amnesia or just kept his real identity a secret until his mom died? Why didn't he tell his family about his past? So many unanswered questions!