Three little dragons in the Forbidden Forest have drunk a vial of a potion that Casper has created in science class. They become spellbound, and create a huge panic at school.
The Scare School students are getting ready to stage a play, but there's a problem: Dummy Girl has disappeared! It's Woodward, the figurehead on Cappy's pirateship, who must replace her urgently.
Casper and Blodge get caught after using Alder @ Dash's office microphone to make funny announcements to the whole school. But Blodge disappears before he can do the task he was given as punishment.
Once again Jimmy is being bullied by his schoolmate Norman. Jimmy has had enough, and with Casper's help, he manages to take Norman to the uncles' manor to give him a good scare.
A magic lantern found by Casper in his uncles' manor, turns Jimmy into a ghost! At last he can do everything Casper does! Jimmy seems to enjoy his new powers a bit too much, which ends up putting Casper in a tricky situation.
While visiting Cappy, Casper learns that Woodward, has disappeared while the Gallion was going through a storm in Deedstown. Casper and Jimmy go looking for him throughout the city, but will they find him and bring him back?
The Bedroom scare competition is about to begin, and each little monster is assigned a different house. Everything is going fine, except for Casper who ends up in a home where one little kid is simply afraid of NOTHING!