Although an understanding of nature of science is a core element in scientific literacy, there is considerable evidence that school and university students hold naive conceptions about it. It is argued that, whilst the failure to learn about nature of science arises from its neglect in formal science education, a major reason is the adherence to the precepts of pseudo-science, a set of beliefs that have wide cultural currency in the general population. University science and non-science students were interviewed about their beliefs in and explanations for "water dowsing", a pseudo-scientific approach to finding groundwater. The demarcation criteria between science and pseudo-science and students' research designs into "water dowsing" were also enquired into. The results show that many students believed in the working efficacy of water dowsing and stated pseudo-scientific explanations for it. Furthermore, they were unaware of the demarcation criteria between science and pseudo-science, and designed naive research studies to enquire into "water dowsing". (Contains 4 tables.)