The rainbow is in dire need of repair, and Snuggles tries to figure out how he can make the rainbow better, so he invents a diamond-making machine. Things go awry when Willie Fox tries to steal the invention, causing the machine to go haywire, and ultimately create a massive diamond in Rickety Rick. When Doctor Snuggles investigates, he is persuaded to enter the diamond, where he meets up with Woogie. There, he is told to make a rainbow-repairing machine with the large diamond.