The plot chronicles the exploits of Michael, a teenager who is using marijuana and stealing his father's beer. His younger sister, Corey, is worried about him because he's started acting differently. When her piggy bank goes missing, her animated tie-in toys come to life to help her find it. After discovering it in Michael's room along with his stash of drugs, the various animated characters proceed to band together and take Michael on a fantasy journey to teach him the risks and consequences a life of drug-use can bring and save the world.
In Corey's bedroom, an unseen person steals her piggy bank from her dresser. The theft is witnessed by Papa Smurf, who emerges from a Smurfs comic book with the other Smurfs, and alerts the other animated characters in the room (Garfield as a lamp, Alf from a framed picture, Baby Kermit as an alarm clock, Winnie the Pooh as a doll, Alvin, Simon, and Theodore from a record sleeve, and Slimer, who phases through a wall).
The characters track down the thief and discover that it is Michael. Simon opens a box under Michael's bed and identifies its contents as marijuana. Meanwhile, Corey expresses her concerns about Michael's change in behavior. He storms out of the house. The characters quickly realize that something must be done about his addiction and they set off, leaving Pooh behind to look after Corey.
At the arcade, Michael smokes marijuana with his old friends and Smoke, an anthropomorphic cloud of smoke with a mafioso-like appearance and personality. Afterward, one of Michael's friends shows everyone a drug that appears to be crack, just as what appears to be the police show up. Upon being discovered, they run out and are chased into an alley by a policeman. Smoke disappears through the wall, telling Michael that, "at times like this, he's on his own." The policeman is then revealed to be Bugs Bunny, who was wearing a policeman's hat. He traps Smoke in a garbage can and uses a time machine (which he borrowed from "some coyote") to see when and how Michael's addiction started. It was discovered that rather than wanting to get started on drugs, he was bullied into doing so by his "friends".
Back at home, Michael's father notes that two of his beers are missing, but is convinced by his wife that he drank them the night before while watching football (the implication is that Michael actually stole them, unknown to both).
Meanwhile, Michael's mother expresses her concerns about him to Corey and asks her if there is anything wrong, to which she replies no. Pooh comes to life soon after, and asks why she didn't tell her mother about Michael. She explains that if she does so and Michael gets in trouble, she will be the first one he will suspect. Pooh admits that may happen, but asks her to think about what will happen to Michael if she doesn't. She tries to explain things to her father, but is unsuccessful.
In the park, one of Michael's friends says that she can buy crack cocaine for ten dollars. He is uncertain of this, but Smoke steals his wallet and tosses it to her, who runs off with it down an alleyway. Michael gives chase, but falls down a manhole with Smoke. There, they are greeted by Michelangelo, Baby Kermit, Baby Miss Piggy, and Baby Gonzo.
The Muppet Babies take Michael on a roller coaster ride through a drug-inflicted human brain. When it is over, he realizes that the brain they just toured is his own and that they are currently inside him. He is also about to fall off his skateboard. The Muppet Babies escape, but Michael and Smoke are left behind.
Michael wakes up in his own bedroom and thinks the whole experience never happened. At that moment, Corey comes in and tells him that Pooh wants to know why he never talks to their parents anymore. He tells her to tell Pooh to "mind his own business" and kicks her out. She runs off in tears, and he regrets his behavior. However, Smoke comes out from under the bed and claims that he did the right thing. He points out that Corey is his little sister and that he doesn't know what's right anymore. As he stares into a mirror inside his marijuana box, his reflection is replaced with Alf's, who pulls him through the box into a hall of mirrors. Smoke tries to follow but is left behind.
Inside the Hall of Mirrors, Alf shows Michael his reflection of how he is today, then his reflection if he doesn't stop taking drugs: an aged, corpse-like version of himself. When he insists that he could quit if he wants to and that he is in charge of his own life, Alf takes him to see 'the Man in Charge' -- Smoke.
Corey and Pooh re-enter Michael's room and find his marijuana box. Smoke appears and tempts her to try it. When Pooh tries to persuade her otherwise, he is thrown into a cabinet by Smoke. Corey reasons that if she does what Michael does, then maybe they could have fun together, like they used to before he started doing drugs.
Michael comes to a fortune-telling tent and asks the stall tender (Daffy Duck) to see his future for him. It turns out to be him lying on his death bed, his face even more ravaged than what Alf showed him. He is horrified by the prospect of that being his future, but Daffy tells him that it can be avoided if he stops taking drugs, along with the help of some advice from Alf, Bugs Bunny, the Muppet Babies, Huey, Dewy and Louie, and Michelangelo.
Michael runs out of a nearby door back into his bedroom, just in time to stop Corey from using the drugs herself. He tells her that he never wants to see her end up like him, and admits he was wrong, though he is unsure if he can change. She advises him to talk about his problems to their parents and to her. Smoke tries to persuade him otherwise, but he throws him out of the window, as he feels that he "listened to him long enough". As he lands in a dump truck, Smoke vows to return. Michael admits that Smoke is right, and that he will try to do so. Corey agrees but says that "when he gets here, we'll be ready for him", to which the characters add a resounding agreement.
The special ends with Michael and Corey going to tell their parents about his drug problem, while Pooh jumps into a poster on the wall with the other characters.
The characters, from 10 different franchises, are:
- The Smurfs: Papa Smurf, Brainy Smurf, Hefty Smurf (Although Smurfette is seen on the poster and VHS cover, she actually does not appear in the special.)
- ALF: The Animated Series: ALF
- Garfield and Friends: Garfield
- Alvin and the Chipmunks: Alvin, Simon, Theodore
- The New Adventures of Winnie the Pooh: Winnie the Pooh, Tigger
- Muppet Babies: Baby Kermit, Baby Miss Piggy, Baby Gonzo
- The Real Ghostbusters: Slimer
- Looney Tunes: Bugs Bunny, Daffy Duck (Wile E. Coyote is mentioned but not seen, but his time machine was used by Bugs.)
- Teenage Mutant Ninja Turtles: Michelangelo (Although he appears in the special, he is not shown on the poster or VHS cover.)
- DuckTales: Huey, Dewey, and Louie