We open on Gus holding the engagement ring Shawn was going to give to Juliet without telling him first. Shawn tries to avoid the question, but ends up explaining that it was solely his "emergency ring" and that he only keeps it on him as back up at all times just in case. Shawn apologizes to Gus and promises that if he ever does end up proposing to Juliet that Gus will for sure be the one to know first. Gus is still unsure of where Shawn's head is at, but decides to accept his apology.
Shawn and Gus oversee a huge shipment of various art and artifacts arriving at a museum loading dock. After Shawn gets his hiking watch stuck in one of the shipment crates, the curator comes over asking what they are doing there. Shawn explains that they were hired to "sense trouble" during the shipment. The curator says that he didn't sign off on Shawn and Gus's presence. He in turn reassigns them to something else... guarding the wall that guards the shipment.
Just then, Shawn and Gus see a woman getting attacked. Shawn runs to her rescue and is successful in helping her. However, when Shawn and Gus return to their post, they see that the wall they were supposed to be guarding has been blown out, the shipment has been stolen and is currently speeding away on a truck.
Back at the SBPD, the curator explains that the stolen art & artifacts collection belonged to an eccentric, deceased billionaire, Yerden, who was having this collection moved from the Louvre and installed in The Santa Barbara Museum of Art.
Shawn realizes that the watch he dropped in the stolen crate has a GPS on it, and they will be able to locate exactly where the crate ends up. Shawn decides that in order to track down the crate properly, he needs the help of Despereaux. Despereaux is happy to help, as his trial is close to ending, and he is on the brink of finally being acquitted. Despereaux gets straight to work and uses his military GPS tracker to find out that the crate has been taken to a factory.
Despereaux, Gus and Shawn, dressed as Indian Jones, sneak into the factory and see a host of bad guys raiding the crate. But the strange part is that they only take one thing from the expensive pile: a rusty Civil War-era dagger worth only about $9,000.
Just then, Shawn notices the same woman he rescued earlier, examining the dagger with the bad guys. Despereaux knows who the woman is. He tells Shawn and Gus her name is Jacqueline, a high thief who is strictly business and wouldn't be messing with a Van Gogh... unless she's going after Yerden's core collection. Despereaux says that Yerden had a core collection that housed his most prized items, but he never let anyone know where it was. Legend says that the dagger "protects it." Suddenly, Despereaux sneaks down there, steals the dagger from the bad guys, and brings it back up to Shawn and Gus. Just as they are about to leave with the dagger, Jacqueline and her crew spot Shawn, Gus and Despereaux.
Shawn and Gus split up from Despereaux and each try to make their escape by boat. Shawn and Gus can't get the boat away from the dock. But Despereaux can. A boat chase ensues leaving Despereaux's boat caught in the line of fire. His boat explodes and Shawn's world crumbles as he realizes his hero Despereaux was just killed.
Juliet and Lassiter arrive on the scene and confirm that the body was Despereaux's and that the Yerden's crate of artifacts was found and will be returned to the art museum. Lassiter and Juliet think it was Despereaux who was trying to steal the artifacts all along, but Shawn tells them that it was a woman named Jacqueline who was behind the burglary.
Shawn learns from Despereaux's lawyer that he was his only friend and therefore will inherit all of his money and assets. Then the lawyer drops another bomb on Shawn: Despereaux was never going to be acquitted in court like he told Shawn and Gus originally. He was actually losing his trial.
Shawn immediately goes to see Woody to make sure it was actually Despereaux's remains that were found on the boat. Woody presents a few items and leftover body parts, but Shawn still doesn't believe that Despereaux is actually dead. He is convinced he is faking it. But Woody says that the dental records match, and that the remains surely belong to Despereaux.Shawn eulogizes Despereaux at the funeral even though he still believes that Despereaux is not dead. Henry then shows up with a piece of paper that tells Shawn that the SBPD has confirmation that it was Despereaux's body caught in the explosion.
Shawn is devastated. He loses it at the podium, then shortly after, he is approached by Jacqueline. She wants the dagger and thinks that Gus and Shawn have it. She threatens them, but luckily they are saved by the presence of the SBPD.
Turns out, Shawn does have the dagger and his intention is for him and Gus to use it to find Yerden's secret core collection of buried treasure that Despereaux alluded to earlier. Gus doesn't want anything to do with finding this treasure, but Shawn keeps insisting, as he will not let Despereaux die in vain. Shawn and Gus's arguing escalates into a full on brawl between the two. The dagger flies out of Shawn's hands. Shawn examines the dagger and finds that a false cap has flown off the end of it, revealing a key.
They go back to the museum curator to question him further about Yerden's core collection. They show him a picture of the key and he tells them that a key like this odoesn't turn; it is a pressure point key that opens the lock by insertion — designed to open a secret wall inside an old safe, perhaps. The curator tells them that he has seen this type of lock at Yerden's estate — an estate that has been turned into a guided tour.
At the estate, Shawn sticks the dagger key into everything he thinks it will fit into. A slot in the fountain outside actually works and they realize that they have opened a secret passage that leads underground.
In the underground room, they are shocked to see Jacqueline pointing a gun at them telling them to pull the lever that will open the vault to the core collection. Shawn does so and they see a sign saying "Look Behind You" hanging on the wall in the vault.
Just then, Jacqueline is knocked out with a shovel... but by who? It's Despereaux!
It turns out Despereaux faked his own death by changing his name in the DNA base to someone else's. Shawn and Gus are beyond relieved. Despereaux presents what he found in the vault: a gold vase. Shawn opens the vase and finds Yerden's ashes. All three are disappointed by this. But Shawn quickly discovers that the collection is not in this vault, that it is in Yerden's actual resting place, a crypt near the estate.
They break in and they discover, lined in the walls, six wrapped paintings. They immediately think these paintings are undiscovered Michelengelo's and DaVinci's. However, when they unleash the paintings, they discover some really amateurish art... certainly not of Michelangelo caliber. They look at the artist's signature: "Harrison Yerden" — the paintings were his originals! His secret treasure was the art that he himself created. The three are severely let down by this.
After Despereaux says his final goodbyes to Shawn and Gus, they learn that the SBPD only uncovered five paintings from Yerden's crypt, not six. From this, Shawn realizes that Despereaux stole one of them. In the end, we see Despereaux stripping the top layer of paint off Yerden's canvas. Underneath, we see that the painting really was an original Rembrandt all along.