During World War I, Hardt, a German submarine captain, is sent to a secret rendezvous in the Orkney Islands near the home base of the British battle fleet. He has instructions to meet a spy there who will give him his orders. At the same time, Anne Burnett is proceeding to the islands to take a new position as schoolmistress and be near her fiancé, Reverend John Harris. On her way, she is kidnapped by German spies, and eventually a new schoolmistress appears and contacts Hardt. She gives him orders to sink the British fleet and tells him that specific instructions will be forthcoming from Lieutenant Ashington, a British traitor in the employ of the Germans. Soon after, the alcoholic Ashington arrives with a set of plans detailing the movements of the British battle cruisers. Hardt transmits these to his submarine crew, ordering them to torpedo the English fleet. Although he detests Ashington, Hardt finds himself attracted to the new spy, and consequently, when he sees her embracing Ashington, his jealousy is aroused. In actuality, the schoolmistress is Ashington's wife was pressed into emergency service as a counterspy after the true German spy was captured. When she becomes fearful of Hardt, Ashington smuggles his wife aboard the St. Magnus, a ferryboat transporting German prisoners of war. At the last moment, Hardt realizes that the girl and Ashington are actually counterspies and escapes aboard the St. Magnus. Inciting the prisoners to mutiny, Hardt commandeers the boat and tries to head off the submarine's deadly rendezvous. Hardt's own submarine, acting on his information, torpedoes the St. Magnus, and as the British destroyers shatter the submarine with depth bombs, Ashington's boat rescues all the passengers of the St. Magnus except Hardt, who goes down with the ship.