Polly & her new ghostly friends William Rex & Magnus wake Li-Mei the Chinese porcelain Fu Dog from the Red Drawing Room The little Pekinese tells them her adventures with Sarah Penhallow
- how they investigated rumours of smugglers & sighted a ghostly Green Lady down at the cove But when Polly looks at the family portrait she realises that there were actually two dogs Eventually Li-Mei reveals that she had a companion Han but she thinks that he drowned down by the cove Together the friends set off to solve the mystery once & for all & discover a secret tunnel Here they come across a broken statue of a dog beneath a rockfall Then they see a vision of a tiny dog running after a group of smugglers only for the tunnel to collapse on him Polly returns to the house with the statue & hides it in a drawer of a lacquer cabinet When she opens it again the cracks have gone
- Li-Mei & Han are reunited at last on the mantelpiece