While Sonic the Hedgehog and Tails are out on patrol in the woods of the Emerald Hill Zone, they encounter a gang bullying a worm. When they refuse to stop making fun of him, Sonic jumps in and attacks the bullys, leaving the worm to escape. Tails follows him, but the worm doesn't seem to happy about it, telling Tails not to follow him. As the worm jumps into a hole, Tails can't stop and ends up falling in after him. Sonic is left on the surface, puzzled as to the whereabouts of his friend.
In the Underzone, two miner worms are horrified that Zeg, the rescued worm, has brought a "surface dweller" to their home. Although Zeg didn't invite Tails along, he and the fox are summoned to see the Queen, who informs Tails that worms desire no contact with people on the surface. In return, nobody on the surface should ever discover the existance of the Underzone. Since Tails has stumbled upon it, he is forced to live there for all eternity. Tails is distraught that he will never be allowed to return to his home and feel fresh air ever again. After a quick offering of mouldcake, Tails is taken on a tour of the Underzone by Zeg, explaining that they mine for coal which is used to make everything they ever need. Unfortunately, one of the workers accidentally strike a pocket of poisonous gas which begins to spill out into the tunnels. Tails thinks fast and whirls his tails at it, stopping the spread of fumes and aiming it into uninhabited areas. The distraction gives the miners a chance to find something to seal the leak.
For the fox's bravery, the Queen offers him anything he wants, perhaps a lifetime supply of mouldcake. Tails is still miserable and just wants to go home. The Queen reluctantly grants his request, knowing that Tails would probably tell everyone about the Underzone. Tails promises he won't and the Queen urges him to forget everything he's seen. As Tails emerges back in the Emerald Hill Zone, he finds Sonic but refuses to tell him about his latest adventure.
- True to Tails' word, the Underzone was never mentioned again, nor were the worms ever seen.