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Kit feels that it is his own fault for the kidnapping, and as he helps Baloo find his way to Pirate Island, he confesses the story of his past. Until recently, he was an air pirate himself, but after about a year with Karnage and his men, he got sick of it and rebelled against them by taking the electrical stone and fleeing from them. Baloo sympathizes for him. While that is going on, Karnage and his men hijack another one of Shere Khan's planes, but they only steal seemingly worthless and useless items.

As Baloo and Kit land in the volcanic Pirate Island, Rebecca seduces the prison guard into letting them out by saying she will give him the deed of ownership of the Sea Duck if he promises to let them go free. The guard agrees to this, but just as he gets the keys, Baloo knocks him out and takes the deed, then lets Rebecca and Molly out. Just then, Karnage and his men return, and Baloo and company are forced to hide from the pirates' sight. Upon his return, Karnage reveals the master weapon he has been working on building using the junk they have stolen – a lightning gun, with which, he says, they will use to plunder Cape Suzette. He then sings a catchy song about what it means to be air pirates, during which Baloo and company try to sneak past disguised as other pirates, only to have Baloo foolishly try to prolong the song, blowing their cover in the process. To cover their escape, Kit pretends to rejoin the pirates and gives them the stone, but his acting angers Baloo, who believes it to be true. Baloo, Rebecca, and Molly make their escape not knowing that Kit was faking his betrayal, but the pirates are right behind. With the pirate fighters unshakable, Baloo turns on an overdrive function in the Sea Duck that allows them to get away very fast.

Upon returning to Cape Suzette, they are suddenly snatched by Shere Khan's men, who bring them to Khan himself who is anxious to recover his stone. Rebecca has no clue about what the stone is, so Khan has his scientist Dr. Debolt explain it: The "stone" is a "sub-electron amplifier", a one-of-a-kind creation that can generate limitless electrical energy and is powerful enough to run Khan's entire corporation. Khan chastises Baloo for not retrieving the stone as promised, and Baloo responds by complaining about everyone who is in the room with him. Back at Higher for Hire, Baloo packs his bags into the Sea Duck, which he buys back from Rebecca by paying her with a bag of gold dust that he had taken from the pirates earlier. Rebecca and Molly, though, do not want him to leave, partly because they do not believe that Kit has really gone bad.

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