Michael and John are sorting out their toys to give away though Michael is adamant on keeping Pinky, his beloved Teddy bear.
In Neverland, Captain Hook has had it with Smee and decides to audition the other pirates to see who can take Smee’s place as Hook’s first mate. Meanwhile, Michael is upset and missing Pinky and soon his sobbing leads to all the plants and trees withering. When Peter Pan learns that Michael wants his teddy, he flies off to London in search of Pinky.
Michael needs to get back his happiness as quickly as possible and the only solution is to go find this teddy bear that has such an inseparable link to his childhood. The Chief of the Indian tribe informs Peter that if this does not happen, Neverland will be in grave danger.
But the pirates start hurling cannon balls at Peter in a bid to impress the captain. This leads to Peter losing Pinky and Michael being even more inconsolable than ever. Is Neverland ever going to be the same again? Or will Peter manage to find the stuffed animal who is now the prized possession of Captain Hook?