Kate Redding, a sister of Nicholas and Sarah, is playing a new computer game called Pirate Islands, which has been created by her father.
The pirates arrive and chase the gang off the island, causing Sarah to trip against a tree trunk which triggers a secret entrance inside the tree, which contains stairways up towards a hidden treehouse, the gang store their few belongings and decide to call this place their new home.
A hidden cabinet inside the tree house stores wet boots, which are found by Kate, who discovers they are power-ups in the game which allows the characters to walk on water, after raiding the pirate ship and discovering a treasure map, Blackheart reappears and threatens them with the scanner, but Mars knocks it out of his hand and they escape from the ship.
Kate, furious, returns the next day with the power-up boots and takes control of the ship, stealing the scanner and escaping, she discovers back at the treehouse the batteries are dead as Blackheart has used it multiple times, saddened by this outcome, Kate announces they will have to stay here, 'A little bit longer'.
After searching the logbook for clues, Kate realises her music box has batteries identical to the ones needed for the computer scanner, however after multiple events, it has ended up in Blackheart's grasp.
Kate confronts Blackheart to meet her at the beach to swap the music box for Quade's logbook, but she is kidnapped in her attempt, only to be saved by Nicholas's jetpack joyride.
Kate pushes him over and grabs back the scanner escaping, leaving Mars about to be killed and Sarah and Nicholas captured.
The village catches fire and is destroyed as Blackheart fights his way through the storm and rips the scanner out of Kate's grasp and collecting her bag containing the logbook.
Blackheart finds a clue, holding it against a mirror he discovers a secret code which pin points to a location on the main island.
Mars teaches Kate to sword-fight, and is banished as the village leader for not helping the castaways look for the treasure.
Inside, Kate finds a wooden floating wheel, but as she leaves, Mars grabs it from her, and tells her they are no longer friends.
Before a winner is announced, Blackheart arrives and Kate leads him inside the ship, she takes the wheel and exists a different way.
Blackheart is slowly falling apart and takes the scanner to the forest, turning it on, Pirate Islands begins to rip apart for a second time.
Mars and Kate, now friends once more, take the diamond to Quade's ship as he tells them how his heart was broken, he evaporates, leaving behind a floating portal, the diamond is inserted and a beam of light explodes from within leaving behind a holographic map, showing a secret island has risen from the waves, that's where they'll find the golden idol.
However, just as they are about to enter the final part of the treasure hunt, Blackheart arrives and throws them off the cliff to the rocky ledge below, with no chance of escape as the pirates head off towards the idol.
They face the dreaded Captain Blackheart and his dangerous, seductive new First Mate, Lily and a band of fierce pirates for a hoard of treasure stolen from an Egyptian Pharaoh's tomb by the legendary pirate ship, Neptune's Revenge, and its captain, Salty Ben.
This is a problem for Marty, as Lily is crueller, more suspicious and far cleverer than Blackheart, who is more there for comedy than fast-paced action scenes.