Inspector Jara and Trpelka, the officer assisting her, investigate what happened to Ivan Lausman, but they are unaware that the nixes, or Water People, are also after him and he has gone into hiding.
Lausman is enjoying nix life and Jara, who is trying to track him down, is humiliated when a picture of her quarry, taken by a tourist, appears in the paper. Trpelka nearly drowns during a stake-out.
Jara makes a breakthrough when she receives another set of photos. Lausman attends a nix history lesson by Dr Magda Mrackova and learns about the 'magic water' of Vysehrad lake, hidden beneath Prague.
Jara breaks into a boat belonging to Lausman's protectors Eduard and Johana, steals some strange food items and sends them off to the lab. Dr Jech is confused by the results of his tests on Lausman.