It's the 1840's in the Florida Keys and Loxi Claiborne is running the salvage business her dead father started. Loxi meets Jack Stuart during a salvage of his wrecked ship, the Jubilee. The shipwreck is shown to be the work of King Cutler, a rival salvager. Loxi and Jack fall in love and plan to marry.
Loxi later visits Charleston with her cousin Drusilla where she decides to play up to Steven Tolliver, who can secure the captain's position for Jack on the new steam ship, the Southern Cross.
Drusilla returns home to Havana and Loxi and Steve return to Key West. Steve has come to rid the Keys of pirates like Cutler. Cutler in turn arranges to have Steve shanghaied by the crew of the whaler Tyfib. Loxi hears of the plot and gets Jack to help her save Steve. Later they discover that Steve has Jack's appointment to the Southern Cross with him. Angry over a seemingly underhanded act, Jack meets with Cutler before sailing to Havana to take command of his new ship.
Rumors circulate and prices of the cargo of the Southern Cross go up and down wildly, leaving Steve to suspect a wreck is planned. He commandeers the Claiborne (Loxi's salvage ship) with Loxi on board and heads to Havana to stop Jack. Loxi disables her ship and they sit becalmed in a fog bank as the Southern Cross piles into a reef and sinks. Unknown to Jack, Drusilla had stowed away to return to her lover Dan Cutler and she is drowned.
Jack is put on trial for wrecking his ship and the testimony reveals a woman may have been on board, though none was rescued. To determine if a woman is in the wreck, Steve agrees to dive to the wreck with Jack.
While down in the wreck Jack and Steve discover proof that Drusilla was on board and has been drowned. They are attacked by a giant squid. Jack saves Steve's life, and is lost when the Southern Cross slips off the underwater shelf into deep water.
Loxi seems to get over the loss of her intended husband pretty quickly and winds up in Charleston with Steve.