On Halloween the gang finds themselves at a local carnival where they decide to watch a magic show performed by the Great Krudsky. Before the show Scooby splashes the magician and offends the magician. Later, Shaggy and Scooby upstage Krudsky during the show.
Unsatisfied as a two-bit magician, Krudsky devises a plan to steal the Goblin King's Scepter after he catches fairy princess Willow. Once he has the scepter, Krudsky unleashes the goblin horde and plans to rule the world and take his revenge on Scooby and the gang.
Shaggy and Scooby must take the Grim Reaper Railroad to the underworld to save the world and themselves. There they meet the friendly Jack O'Latern, the Headless Horseman, a bunch of witches and fairies. Lots of Halloween fun.