Under the rains of the black clouds that circle above, Hook takes his ship up into his castle. He looks among his most treasured possessions, and finds his cloak missing. Smee then admits that he was taking it out to dry, and that he could not find it since. Hook bursts into a fury that shakes the whole castle. Meanwhile, the lost boys are happily playing with the cloak, while Wendy worries that all this fun could cause much trouble...