After Odie runs off with their donuts, he and Garfield encounter a giant squid in the sewer.
Garfield and Odie are watching an adventure movie involving fights with underwater creatures. They then go to the kitchen, where Jon has numerous boxes of donuts for Liz's party; due to a surplus, he lets Garfield have some of them. Garfield ends up taking everything. When Jon contacts Liz about getting more donuts, Liz overhears the movie when a character mentions a giant squid. She tells him of the possibility of giant squids/octopi living in the sewers, which Jon finds difficult, but not impossible, to believe.
At the park, Garfield and Odie discuss how to divide the donuts with each other. When Odie ends up taking all of them, Garfield follows in hot pursuit. Some donuts get lost along the way, ending up getting taken by others, but not Garfield. Garfield eventually tackles Odie, which results in the boxes landing on top of a car, then topping. The donuts spill out, rolling and bouncing down a hill until the fall into the sewers.
Garfield argues that it's Odie's fault for losing the donuts, then expects him to go into the sewers to recover the donuts. As Garfield walks off, Odie is nabbed by a tentacle and eventually dragged down. Garfield acknowledges that he'll have to go into the sewers in order to rescue Odie. After inadvertently falling into the water, he calls for Odie, soon losing hope. Just then, he encounters another tentacle, which grabs him. He then sees the giant squid, which also has hold of Odie.
A newscast notes that a squid is taking people around the city, and that it has a cat and dog in its clutches. When the squid tries to eat Odie, Garfield diverts its attention to a nearby pile of donuts. It lets go of the pets in favor of munching on the donuts. The duo run off to valve, where they try turning it to get the water flowing. The squid advances, but is then pulled away by the current. Garfield and Odie make their way out of the sewers, just after Liz informs Jon that, according to a Navy report, the squid is in the ocean.
Jon drives home with his pets, commending them for getting rid of the squid. Nevertheless, Garfield feels down since he didn't get any donuts. Meanwhile, the squid is still a menace around the shore.