The next day, Irene goes exploring in the castle after discovering a magical secret door in her bedroom. She ventures into a tower and meets the spirit of her Great-Great-Grandmother, also called Irene. Grandmother informs the young princess that she will be there to help her, for Irene will soon be in grave danger. The same day, Curdie and his father are underground in the mines, and Curdie falls through a pothole and into the realm of the goblins. Hidden, he follows the goblins to a vast cavern where the sniveling Goblin King and the malevolent Goblin Queen are holding an audience, announcing their scheme to flood the mines and drown the "Sun People"... humans. Suddenly, Prince Froglip, the feared, yet spoiled and infantile, heir to the goblin throne, announces that drowning them is "Not enough!" and states that he shall abduct the Princess of the Sun People and marry her, thereby forcing the humans to accept the goblins as their rulers. He claims that this is revenge for the humans exiling the goblins underground centuries beforehand. Before Curdie can run and tell the others, the goblins find him and put him away in a dungeon. Luckily, Irene and Turnip have snuck out of the castle again, following a magic thread given to her by her grandmother, invisible to everyone else. The thread leads Irene to Curdie and working together, Curdie is released from his improvised cell. The two children are chased by the goblins but luckily escape. The miners are warned of the flooding plan in time to begin erecting supports to keep most of the tunnels free of water and the castle is also put on guard. The goblins do attack and Curdie must show all the castle people how to fight – namely, to jump on the goblins' feet and sing. Curdie also realizes that if the miners are successful, the water will have nowhere to go but up and end up flooding the castle. He tries to get everyone to leave and he and the king realize that Irene is missing. Curdie finds Irene being held captive by the evil Froglip. All three are knocked down by the arrival of the flood waters and Curdie tries to rescue the princess and not get thrown over the battlement edges by the goblin prince. With some help from Irene, Froglip is flung away and everyone is saved.
