Lincoln and Clyde are watching ARGGH!, where Hunter Spector is investigating an abandoned hair salon in Erie, Pennsylvania. The minute he steps in, he finds the chairs spinning around. He pulls out his containment device and seals the ghost away. He then makes an announcement saying that their next stop will be in Royal Woods. Upon hearing this, the boys decide that they have to go and see it.
One week later, Lincoln and Clyde head off to the location of the ARGGH! episode: a cemetery house haunted by the spirit of a deceased groundskeeper. However, when they arrive, they find that a lot of people have arrived to watch the show. Unable to see anything in the back of the crowd, they climb a tree to get a better view only to fall due to Clyde's acrophobia. The stage manager notices them, and mistakes them for crew members who are lying on the job due to the outfits they're wearing. They make the most of this mistake, and enter the house to see the action while the manager tells them not to miss their cue. Inside, the episode begins filming and the crew does what they can to give a realistic vibe of a haunting which the boys think are distractions. The manager tells them to fire gelatin, and they hit Hunter with it. Hunter pulls out his device and "captures" the spirit of Groundskeeper Jim. The boys discover the shocking truth that the show is fake. On their way home, they contemplate on what they had witnessed; Lincoln thinks about all the time he wasted watching the show and Clyde is just speechless about the whole truth.
The next day, Lincoln is deleting all of his recordings of the show after finding out the truth (which pleases Lola since it gives her more room on the DVR for her show about plastic surgeries gone wrong). He gets a call from Clyde's dad, Harold, and is told to come over because Dr. Lopez is on vacation and doesn't want to be disturbed. Lincoln goes over and is told that Clyde has been acting unlike himself. He's throwing out everything that he once believed in and now thinks is a total lie because of what he saw on the ARGGH! set, including his Operation: Dessert Storm commemorative plates and their anti-alien abduction helmets, no longer believing any myth. Lincoln decides that he has to talk to Hunter.
Just before the crew can leave, Lincoln confronts Hunter about what happened to Clyde, and Hunter feels ashamed because Clyde has written him fan letters every week, even noticing a detail no other fan did, and he crushed the boy's dreams. He explains to Lincoln that his show has to fake their ghost hunts if they can't find a real ghost to hunt in order to meet their schedule. Hunter doesn't know how to undo what he did, but Lincoln gets an idea. Over at Clyde's house, he's lounging in a pool while eating a snack, not believing the myth that if you go swimming after eating, you'll get a cramp. His behavior is enough to make Howard call Dr. Lopez while Harold tells him not to. Lincoln calls Clyde and tells him to turn the walkie to channel 4. Hunter calls the crew for help, but no one is responding. Clyde doesn't believe this but decides to come along for Lincoln's sake.
Back at the cemetery house, Hunter and Lincoln act out a haunting in the house which Clyde doesn't believe in until an empty can of cherry soda flies at him, because Groundskeeper Jim loved cherry soda. He starts to believe again and, with the help of the two ARGGH! cadets, Hunter captures the ghost. Clyde's beliefs are restored and he goes home to write Hunter another letter. Lincoln admits that lying to Clyde was a little drastic, but he was willing to do it to fix his best friend's issues. As Hunter and Lincoln talk about the things that they had staged, they realize that neither of them set up the empty flying soda can. The device opens up and a belch comes out to the astonishment of Lincoln and Hunter, which means that there really was a ghost after all.
Back at Clyde's house, he and Lincoln are watching another episode of ARGGH!, and Clyde's dads offer them snacks, but they're gonna go swimming after the show, so they don't want to take the risk of getting a cramp. Howard and Harold are elated that their son is back to normal.