Sarah scolds Billy and Mike when she catches them playing with super soakers through KITT's open windows. KITT is waterproof, but only as long as his windows are rolled up. Torres interrupts with news of a mission.
Undercover as a smuggler, agent Nick Turner disappeared 48 hours ago in Baja, while trying to make contact with a terrorist cell. Torres thinks he was being asked to help bring a weapons system into the U.S. An extraction team was sent to retrieve Turner from his last known location, the hotel El Surfer, but they've disappeared too.
The signal from Turner's tracking transmitter is dying, so Torres wants Mike and KITT to go after him... along with Zoe, who speaks Spanish and surfs, since Mike "doesn't do" water. They'll be undercover as honeymooners Devon and Bonnie.
On the drive down, Zoe tries to get into character by getting in the mood. When Sarah pops up on KITT's monitor, Mike pushes her away. He's disturbed that their hotel room only has one bed. Zoe promises to keep it professional. Nothing will happen, as long as she doesn't drink any tequila.
On the beach, KITT picks up Turner's signal from a beach cruiser containing two men. KITT chases the cruiser to a bluff, where two more guys are waiting with a machine gun and a missile launcher. KITT evades the gunfire, but a missile sends him over the bluff, leaving only a crater behind!
While underwater, KITT sends Graiman a profile of the missile, which is more advanced than anything currently in use. Sarah and Billy have discovered Turner's offshore bank account, which he just drained of $2 million. Also, the bodies of the extraction team have washed up ten miles south. KITT shoots out of the water, stunning a little kid.
With no more contacts or tracking device, Mike and Zoe hit the beach with photos of Turner, where Mike is ambushed by four guys. When one of them pulls out a knife, surfer dude Skyler comes to Mike's rescue, kicking the thugs off "his" beach.
Mike offers to buy Skyler a beer in thanks. Noticing Mike's military tattoo, Skyler admits that he used to be in the service, too. Now in Baja, he's truly free. He only has to do an odd job here and there, and the rest is paradise. Zoe is thrilled when Skyler orders tequila, and he invites them to join him tomorrow at El Pescadero, the locals' secret surf spot.
Zoe doesn't trust Skyler. KITT discovers that he's an explosives expert who was dishonorably discharged from the military, along with his squad of four - the same number of guys who tried to ambush them twice.
Mike wakes up hung over in the hotel room to knocking on the door. Sarah and Billy have figured out how to track Turner, by loading a chip into KITT. They're shocked to spy Zoe naked in bed, and don't really believe Mike's protests that nothing happened. Mike claims that Sarah is just jealous that Zoe is working with him instead of her.
Billy and Sarah stay with KITT as Zoe and Mike meet Skyler on the beach. Zoe tries to prepare Mike with a quick surf lesson, but he intends to wing it, despite the scary huge waves. Skyler takes Mike out in the water to explain that the wrong wave can kill you, then punches him off his board as a killer wave closes in.
Mike wipes out, cracking his board in two. Meanwhile, Sarah, Billy and KITT locate Turner in an RV just down the beach, and are able to catch a little audio, which suggests that Turner is holding Skyler's wife hostage. When Turner activates a jamming device, Sarah sends Billy to investigate the long boxes being loaded into the RV.
The long boxes contain K-17 Cobra missiles, designed by Knight Industries and recently sold to the Department of Defense, which refuses to admit they're missing. Graiman explains that the missiles use stealth technology to modify attack profile based on target. They should have been able to identify KITT as friendly, but not if their logic boards have been modified. Torres orders everyone back to HQ.
When the RV moves to transport the missiles across the border, Torres instructs Mike to put KITT in Attack Mode for an intercept at Coronado Mesa Nuclear Plant. Despite the fact that only two passengers can fit in KITT while in Attack Mode, both Zoe and Sarah insist on coming along for the ride. Of course, if one of the Cobra missiles hits the plant, it's Chernobyl.
On the approach, KITT deduces that Turner, Skyler and his wife are all part of the smuggling team. Graiman warns that KITT can't handle all the Cobras, so Sarah and Zoe drop Mike off. Mike makes quick work of Turner and the guys, leaving Skyler to jump on the roof of the RV with a Cobra.
When Skyler's wife pulls out a gun, Mike punches her in the face. Offering to split the $12 million, Skyler finally recognizes Mike as a holier-than-thou lieutenant he met in Afghanistan. Claiming the problem with people like Mike is they forget the cost of the freedom, Skyler launches the missile.
Sarah and Zoe screech up in time to see Skyler launch the missile. Sarah orders KITT to use his amplifier to scramble the missile's amplification, effectively reversing its direction. Although Mike is on the RV trying to get Skyler off the roof, he jumps away just before the missile hits.
Back at HQ, Torres gets word that Skyler and his team are in full lockdown in a federal facility, and the Department of Defense is finally willing to discuss their "misplaced" Cobras. Mike asks his team if they want to celebrate, but the girls leave him and Billy to play with their super soakers.