When a thief breaks a London jewellers' window, an old lady raises the alarm. While the thief is pursued, she pockets a diamond bracelet unnoticed. Driving off, the 'lady' is revealed as a man in disguise. In a nearby backstreet, the bracelet is passed to a mysterious man carrying a cane ...

English schoolboy Tim Smith begins his Dutch holiday at Harwich docks, where customs officers anxiously search passengers for the stolen diamonds. A Dutch tour guide is particularly aggrieved, reacting rudely when Tim accidentally bumps him.

In Amsterdam, Tim knocks the tour guide over as he rushes to greet penfriend Piet. The boys later see the guide talking furtively with a known jewel smuggler.

Meeting Piet's sister Annike, the kids enjoy a herring snack - unenthusiastic, Tim throws his piece away, startling the tour guide on a boat below, who drops his cane into the canal. Retrieving it, the kids find it contains a diamond bracelet. They'll deliver it to Piet's policeman brother in Rotterdam, hoping to earn him promotion. The guide finds his hollow cane empty and guesses who's taken the gems.

That night grandpa's car is pushed into the canal to prevent the kids reaching Rotterdam, but they set off on bikes instead. After a night in a windmill, Tim, searching for breakfast, is dragged by two thugs into another mill, where a third man warns him to keep his nose out. Later, Piet identifies the man as a diamond cutter.

The guide meets with the windmill gang and heads for market town Alkmaar, where they chase the children through the cheese market. Tim hides the diamonds in a large cheese and the baddies are dispatched with rolling cheeses. The kids escape to Piet's family houseboat, but depart without the diamonds. Luckily they find the bracelet in the cheese mother has just bought, and hide it in a clog, tied to the bargeside.

The crooks pounce at a market garden but the kids pelt them with tomatoes and rush back to the barge, only to find Piet's mother and father held at gunpoint. Demanding the bracelet's whereabouts, the guide knocks out Piet's father. As they search the hold, Piet steals the guide's gun from his side using a fishing line. The boys usher the gang into the hold and lock it. The boys sail crooks and bracelet into the custody of Rotterdam's port authorities and Piet's brother.