Nick, Kate, and Cmdt. Lassard’s officers arrest Tony, his boss Mr. Dempsey, and their henchmen, rescue Lassard and Capt. Harris, and recover the stolen diamonds. At a ceremony at the police academy, the heroes all receive medals of honor from the city of Miami for their efforts, and Hightower gets promoted to Lieutenant for saving Harris from an attacking alligator in the midst of the rescue.
After Lassard makes his farewell address, Commissioner Hurst announces to Harris’ great disappointment that he and the Governor have decided to let Lassard stay on as the academy’s commandant until he sees fit to retire himself.
After his bumbling henchmen fail several times to get the video camera back from Cmdt. Lassard (George Gaynes), Tony (Rene Auberjonois) openly confronts Lassard at the Police Chiefs Convention and demands that he hand it over. When Lassard refuses, he tries to wrest it from his grip, which soon causes the camera to break in two, spilling the stolen diamonds concealed within on the ground. Tony draws out his gun and takes Lassard hostage while his men pick up all of the diamonds, and Lassard quickly comes to believe that all of this is just a surprise police procedure demonstration, so he goes along with everything Tony and his henchmen demand for him to do.
Tony and his men take Lassard up to his penthouse suite and tie him up. Upon suggestions from Lassard, Tony calls the officers downstairs and tells them that he wants a chopper to leave the hotel with and a fast boat to be waiting for him at the harbor, and if all goes well and no cops follow him, he will give Lassard back to them alive 12 miles off of Key West just as soon as they were in international waters. Sgt. Hightower (Bubba Smith) tells Commissioner Murdock (Dan Fitzgerald) that, even though they are in his jurisdiction, he and his fellow officers will volunteer to help free Lassard. Capt. Harris (G.W. Bailey) then develops a plan.
The officers, along with Sgt. Nick Lassard (Matt McCoy) and Officer Kate (Janet Jones), head to the floor of the penthouse and knock out all but two of Tony’s henchmen. When they reach the suite, they find no one there, but see the chopper arriving early, and realize that that must be part of Harris’ plan. Tony and his remaining two henchmen get to the roof with Lassard, where they find Harris and Lt. Proctor (Lance Kinsey) waiting for them. However, Proctor’s incompetence causes him and Harris to lose the advantage, and Harris gets taken hostage as well. The men all board the helicopter, and they get to the harbor and get on the waiting boat, which Tony’s men steer in the direction of the Everglades so he can meet up with Mr. Dempsey (Ed Kovens) and give him the diamonds. The cops interrogate one of the beaten henchmen to find out where Tony has gone to, and once they learn where, they head for the location on assorted vehicles, mainly airboats.
Tony and his men rendezvous with Mr. Dempsey, who orders Tony to kill both Lassard and Harris so there will be no witnesses. Before he can do so, Lassard’s officers show up and start beating up his and Dempsey’s men, prompting him to take Lassard and the diamonds onto one of the airboats and flee. Nick, Kate, Sgt. Jones (Michael Winslow), and Sgt. Tackleberry (David Graf) go after him while the others place Dempsey and the goons under arrest. An arriving Proctor accidentally knocks Harris into the water, where he almost comes under attack from an alligator, but Hightower comes to his rescue and wrestles the alligator into submission.
After a long chase across the Everglades, Tony comes to a stop on dry land and tries to keep the officers away by threatening Lassard’s life. However, after Nick finally smartens his uncle up to the fact that he was dealing with real criminals and not partaking in a demonstration, Lassard easily overpowers Tony and gets the diamonds.
Back at the police academy, Nick, Kate, and Lassard’s officers receive medals of honor from the city of Miami for their efforts, and Hightower gets promoted to Lieutenant for saving Harris’ life. After Lassard makes his farewell address, Commissioner Hurst (George R. Robertson) announces to Harris’ great disappointment that he and the Governor have decided to let Lassard stay on as the academy’s commandant until he sees fit to retire himself. The cheering officers raise Lassard onto their shoulders to close out the movie.
Thanks Tornado Dragon!