The Yellow Claw transports the unconscious Captain America and the captive Frog-Man to his underground base in upstate New York. The villain unmasks Froggy and discovers him to be just ludicrous super-hero wannabe Eugene Patilio. Savoring the irony, Yellow Claw outlines his sinister plan to the boy: having survived his previous encounter with the Avengers, he decided to adopt the guise of legendary guru Bagwan Sri Ananda. Having predicted the destruction of New York by earthquake and tidal wave, he plans to appear before a gathering of his disciples using a mind-amplification device to harness their psychic energies and direct it to cause the prophesied disaster….
Elsewhere, Eugene’s worried father contacts Spider-Man and asks for his help in locating his son and Captain America….
Meanwhile, Cap, still under the influence of the villain’s drugs, awakens in a dungeon. He is found by an elderly man who comforts him and fills him in on the Yellow Claw’s mad scheme. The mystery benefactor present Cap with his shield, which the hero uses to smash his way out of the dungeon. At the same time, Froggy finds himself trapped in a clearing and menaced by giant frogs…until he discovers that the frogs like him. Thanking the higher power who gave him a second chance, Eugene vows to become a real hero….
The next day, the Yellow Claw, in his Bagwan guise, appears before 200,000 followers and is "crowned" with the mind-control device. Captain America, shedding his disguise as one of the Bagwan’s retinue, rips the mask from the Yellow Claw’s face and denounces him to the crowd—but his is too late: the villain has already captured their minds. The Claw focuses their mental energy to create a giant hand to crush Cap—when the cavalry arrives in the form of Frog-Man and his froggy allies, followed by the real rescuers: Spider-Man, the Human Torch and the X-Men’s Angel, Beast, and Iceman. The heroes overpower the Claw’s army and Cap smashes the mind-amplification device, releasing the crowd from the villain’s control. The Claw escapes by jet-pack and Cap thanks Eugene for providing the necessary distraction for Cap to overcome his foe. Eugene’s dad also praises him for his heroic actions.
Epilogue: Cap researches the real Bagwan Sri Ananda, who has not been seen since 1939—and recognizes his mysterious benefactor from the dungeon.