You've got the map, Sly. Select it as a power-up and read its clues to find the treasure. I believe the first clue is... "stand before the statue's gaze, to begin your walk along the treasure's maze."
― Bentley to Sly after arriving on Dagger Island[src]
It is now time for the main event. Sly is looking forward to stealing a pirate ship, as it is a dream every thief has. Since he'll be the first on board, he will need to keep his enthusiasm quiet, as to avoid being detected by the nightwatch.
Sly meets up with Murray at the jolly boat. Murray rows Sly over to the ship so he can climb on board. He uses his Silent Obliteration move to take out the guards. Once the coast is clear, Murray rows the rest of the gang over and they prepare for sailing. Bentley warns them that once they get moving, it won't be long until someone on shore raises an alarm. Despite Murray and Sly's excellent work dispatching the harbor patrol, there are still cannons mounted up in Skull Keep. Bentley figures it's long odds until they get gun crews into position before they make it out into the open. Therefore, Sly insists they set sail for the mouth of the harbor right away. Sly has Murray take up the anchor, and tells Bentley to go below deck to adjust the ballasts, while he raises the sails to get the ship moving. With Murray at the wheel, the gang sets sail for the open waters.
Once the gang is out in the Caribbean Archipelago, they must now figure out where Dagger Island is. It is marked by the red 'X' on the map. Once they arrive at the island, Sly hops off the ship and begins his search for the treasure.
Sly is given the Treasure Map, which allows him to read each clue and get an overall view of the area. The island is packed with pirates, who have a ship anchored on the other end. Also, in that area is the statue that Sly must stand in front of to begin the treasure hunt. After following the clues, he eventually comes across a small beach of sand with rocks spelling "SOS", which is where the treasure is. Dimitri is overjoyed that Sly found the treasure and comes to help him dig it up. The rest of the gang, except for the Guru and Panda King, comes to watch.
Since the treasure is what Dimitri wanted all along, Sly lets him have the honor of opening it and unveiling what is inside. He opens with joy and unveils his grandfather's scuba diving gear. Penelope is impressed by his grandfather's fine craftsmanship. With the diving gear, Dimitri will be able to scuba dive just like his grandfather.
Before they take another peak inside the chest, LeFwee and his crew confronts them, with Penelope in his grasp. Sly tries to bargain with him, while Murray insists on thumping him. However, Bentley disagrees, as LeFwee is a killer and will hurt her if they try to attack him. LeFwee then orders the gang to return to their ship and sacrifice the gold, unless they want to lose Penelope. With no other options, the gang decides to return to the ship. Bentley tells Penelope to stay alive and that they will save her. She puts her trust in them as she is taken away by the pirates. The gang returns to the ship to formulate a rescue plan.
- When sailing into the open water, if one fires the cannons, Murray will warn you that was a bad idea, and the Skull Keep will fire back at the ship.
- If you use the pirate disguise on the purple lizards, they will act like guards and ask for a password.
- The Guru and Panda King are not there to watch them dig the treasure up, possibly due to the fact that someone needs to look after the ship.
- The lizards on Dagger Island make a resemblance to the crocodile from "Rumble Down Under."