The flashlight is seen in Claw's cave. In order to get the flashlight, Freddi and Luther use the funhouse mirror to scare Claw. After that the flashlight will replace the mirror. Freddi uses the flashlight to find one of the golden pipes in a dark cave next to the Carnival Organ.
The flashlight is seen at Torvil Tractor's field and it has no batteries in it. After Putt-Putt puts in new batteries which he got at the toy store, he uses it to find Pete Crane's missing hook in a cave.