The Doctor has promised Jo a holiday on Metebelis III, but the TARDIS materializes in the cargo hold of the S.S. Bernice, sailing to India in 1926. The Doctor maintains they are not on Earth, until they are attacked by a Plesiosaur. Then he doesn’t know what to think. It is April 1926, when a ship of that named famously disappeared, and there are several Edwardian British passengers and crew on board. The time-travellers are discovered as stowaways and locked in a cabin, but shortly the fellow passengers forget who they are, and events recur in a time-loop. They succeed in getting to the TARDIS to escape, but a giant hand reaches down and plucks it away.
Millions of miles from Earth, a travelling showman named Vorg (Leslie Dwyer) and his lovely assistant Shirna (Cheryl Hall) have arrived on the planet Inter Minor to bring a little joy to the gray faced Minoran bureaucrats. Their dilapidated device offers live entertainment—actual miniaturized creatures from all over the universe—Cybermen, Ogrons, and Tellurians included. Fiddling with the machine, Vorg finds a strange object in the works—a tiny blue box—and removes it. He tosses it aside and it grows to huge size. Demonstrating his machine, Vorg reveals how he can change events inside with the twist of a dial.
Jo and the Doctor open a plate in the deck that no-one else seems to see, and climb into the workings of the box, where they work their way into an alien swamp. They are pursued by giant carnivorous slugs called Drashigs (Dishrags) back into the machine. Up above, the stupid bureaucrats of Inter Minor accuse Vorg and his companion of smuggling life-forms, and the machine is impounded. Since their own technology is not up to the task of controlling the machine, they believe they are doomed, but—looking on the bright side—their leader will no doubt be investigated, and this may be good for their careers. When the carnivorous slugs escape from the machine, it looks even better for them.
The Doctor escapes while Jo is arrested as a stowaway—again. He figures out how the machine works—banned by the Time-Lords and believed destroyed--connects it to the TARDIS and then goes back in again for Jo. The Inter Minors shoot the machine, hoping to kill the monsters and the illegal lifeforms as well, but Jo and the Doctor come out and everyone else is sent back to where and when they came from.
The ship was the RFA Robert Dundas, which was being towed to its destruction. The Captain was played by Ian Marter, who later played the companion Harry Sullivan. Both female characters--Vorg’s assistant (Leslie Dwyer) and the passenger Jenny McCracken (Claire Daly) -- were played by actresses who were offered the roles in compensation for being passed over for Katy Manning. Katy Manning did the voices of the chickens in the ship’s hold. Aside from the co-incidence of the title there is no connection to Ray Bradbury’s story “Carnival of Monsters.” The story was well-received as silly, ingenious fun, and indeed the acting was quite entertaining all around.