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The Phantom Wolf was actually a dog coated with luminous paint.
He is a German Shepherd painted to glow.
When Scooby fed him some meat he became friendly.
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Dr. Roscoff kept him hungry in hopes that he would attack intruders who came across his secret gold mining operation that used hypnotized slave labor.
In the end, both Fang and Scooby, covered in the same luminous paint, take a ride on one of the mine carts howling.