In his office, Mr. Krabs shows SpongeBob a secret area, his "hidey-hole". He reveals a treasure chest full of memories from his navy days, including a trophy of hardship and masculinity. He is looking through them because he wants to get back into his navy mindset for a get-together with his old buddies. Mr. Krabs emphasizes how cool he was back in the day and how he cannot wait to show his friends how strong he still is.
Shortly thereafter, Mr. Krabs loses his shell, leaving him "naked" and not strong-looking anymore, for which he is very ashamed. Mr. Krabs shoots the shell in SpongeBob's direction, and SpongeBob slips into the shell himself. Now Mr. Krabs has an idea: to have SpongeBob go in his place to the meeting. After all, SpongeBob can imitate his boss rather perfectly!.
SpongeBob, however, does not end up being the perfect double of Mr. Krabs at the upcoming meeting of Krabs' navy buddies as he takes the trophy and masculinity trophy again. He tries to say things typical of Mr. Krabs, such as "What's that you say? Me daughter Pearl needs an operation? I'll do it me self and save a nickel!" However, he soon trips up and says that he likes jellyfish and soap bubbles. Krabs' naval buddies are confused, but they do not yet suspect that SpongeBob is not really Mr. Krabs.
Torpedo Belly, one of Krabs' old friends, wants to have a "world famous steely belly butt" with Mr. Krabs. This causes the shell around SpongeBob to crack and SpongeBob to fly out from inside it. Mr. Krabs, who was hiding the time of the meeting, can not keep the scheme running any longer, and confesses the truth to everyone at the meeting. He expects to have lost the trophy and prepares to leave, but is stopped short.
To his friends, Mr. Krabs admitting that he lost his shell is very tough (the toughest thing they have ever seen, in fact). Then it turns out that the navy mates also have hidden secrets: Mutton Chop rips off his sideburns and announces, "These are fake!" Torpedo Belly had his torpedo removed long ago. Lockjaw Jones' "lockjaw" is not even the same set that he had in the navy. Iron Eye's namesake iron eye is actually made of Formica. The characters all laugh as the episode ends.