Behind their conservative middle-class exterior, a young couple runs a highly successful sex fantasy magazine. Ironically, to spice up their marriage, the wife responds to a fantasy ad submitted to a magazine, but her new penpal is the prime suspect in a brutal murder.

The world’s most notorious bad guys are invited to the island fortress of super-villain Tan-Gu to compete in an Olympic-style tournament of evil, called the Evilympics. Mr. Magoo and his 12 year-old nephew Justin fight giant robot spiders, ninjas on jet skis, and Tan-Gu’s mutant “Beasteens”, as representatives of the anti-evil task force.

The gang anticipates the opening of Zero Gravity Zone; planning begins for Ray and Noelani's wedding.