Fictional captain in South Dakota is sunk (8)
I believe the answer is:
scuttled
'is sunk' is the definition.
'fictional captain in south dakota' is the wordplay.
'fictional captain' becomes 'cuttle' (captain cuttle).
'in' indicates putting letters inside.
'south dakota' becomes 'sd'.
'cuttle' put within 'sd' is 'SCUTTLED'.
(Other definitions for scuttled that I've seen before include "Of ship, sank deliberately" , "Deliberately sunk" , "Hurried away ignominiously or sank a ship" , "'Scampered, scurried (8)'" , "Ruined - caused to sink" .)