In the small town of Little Pifflington, Lord Augustus Highcastle tells his secretary Horatio Beamish that the war is a very serious matter, especially as he has three German brothers-in-law. He soon learns that a female spy is after an important document in his possession. A glamorous woman visits him. After flattering him by saying how important he is, she tells him that she suspects her sister-in-law of being the spy. She explains that Augustus' brother, known as Blueloo, has made a bet that Augustus can be easily tricked, and intends to use this woman to prove it. If she can get the document, a list of British gun emplacements, and take it to Blueloo, Augustus's incompetence will be exposed.