Ted is preparing for a picnic outing. The day quickly turns into a fiasco as Mrs. Doyle makes the only sandwiches (egg) he hates and that all of the other priests he invited (including Dougal) are unable to make it, as one of them has been found to be smuggling weapons. Ted and Jack travel to the desolate picnic area and sit quietly. They are accosted by a couple of aggressive regulars who insist that the priests move, despite the fact that they are the only people in the entire area. The overzealous groundskeeper, Benson, defuses the situation with unnecessary aplomb and Ted leaves in disgust. He is particularly annoyed by Benson's use of a loud whistle.
Ted is put off further by Dougal's friendship with a rebellious new priest, Father Damien "Damo" Lennon, who behaves like an insolent teenager. Under "Damo's" influence, Dougal pierces his ear, hints at having experimented with illegal drugs, and makes fun of Ted for being unhip and behind the times. That night, someone sneaks into Benson's cabin and steals the whistle (flashing an obscenity to Benson before departing). The next day, the island is in an uproar over the news. The police acquire a helicopter to deal with the threat and the Craggy Island citizenry use outrageous means to protect themselves from the apparent "crime wave".
Ted discovers the whistle in Dougal's coat, hidden in a pack of cigarettes. As he tries to pressure a clueless Dougal into owning up to the theft, Benson and Police Sergeant Hodgkins enter the parochial house. Benson has lost the use of his right leg and uses a wheelchair, due to the shock associated with the loss of the whistle. He reveals that a witness says a priest took the whistle, recognising the collar. Sergeant Hodgkins is desperate for leads. Dougal enters and states that Ted stole the whistle, misinterpreting Ted's concern for Dougal as an admission of guilt. Ted appears dead to rights and abruptly leaves to think up an explanation. After he leaves, Father Frost enters, dragging Father Lennon by the ear. He has discovered that Lennon stole the whistle and attempted to pass the blame onto Dougal. All are satisfied. Ted re-enters and begins spinning a fantastic lie about what drove him to steal the whistle. He continues for some time before realising that all is well. Ted gives Dougal a lecture about putting his trust in those who are "cool". When asked if he had learned anything, Dougal simply replies, "No." The closing credits feature Dougal and "Damo" playing football.