Davey really is chased by thugs, wanting the Cloak and Dagger game which has secret plans for an invisible jet. With the help of Jack Flack (the Atari game's main character, not real but formed in Davey's imagination), Davey stops the thugs that are chasing him. By killing the final thug, he grows up a little, and Jack Flack disappears for good.
When everything culminates at the airport, the elderly couple (spies trying to steal the game) doesn't realize that the walkie talkie Davey is carrying is a bomb until it's too late. With Davey having been pushed out of the plane beforehand, he runs after the plane until it blows up, his father (pretending to be the pilot) walks out of the explosion as Davey's new hero.