Huey, Dewey, and Louie pity the depressed Donald Duck because of the mistreatment he receives from his relatives such as Scrooge McDuck, Gladstone Gander and Daisy Duck. They decide that he needs good friends to help him find his smile again, so they nominate him to deliver some merit badges to the Junior Woodchucks in Rio de Janeiro, they give him a pamphlet containing the woodchucks information on Brazil and they send two telegrams-one for José Carioca and the other one for Panchito Pistoles - to reunite The Three Caballeros.
When Donald arrives in Brazil, he and the other two caballeros enjoy a nice reunion and decide that they need adventure to clean their depressed lives and, at José's suggestion, become diamond hunters in the Mato Grosso, Donald buys an ox and a llama and they explore the interior plateau of region of Brazil.
Soon, Donald is kidnapped by an evil Indian Chief who traps animals and sells them, the chief tells Donald about the 'Mines of Fear' which his father found years ago, José and Panchito free Donald and the captured animals but the chief's necklace is caught by Sẽnor Martinez, Panchito's horse, so he goes after them.
The trio camp in the mountains near a big swamp where Donald reads information from the pamphlet his nephews gave him about a lost city that no one found. They see the three shining arcs behind the swamp mentioned in the pamphlet which form the gate to the lost city. Next morning they build a raft and sail to the city where they find the Mines of Ophir, lose their raft and meet a huge Anaconda. Meanwhile the chief find their mounts with his tribe and finds out about the mines, he makes a reed canoe and finds the trio and the mines.
The chief takes a bag of jewels and tries to leave the caballeros to be eaten by the anaconda. When donald remembers the insults he received from his relatives, he then takes a vine and jump on the chief's canoe and they have a fist fight. Donald's bravery inspires José and Panchito to help him. The chief falls over the falls and the caballeros ride the anaconda out of the swamp where they meet the Indian tribe who gives Panchito the necklace his horse found.
The caballeros then return to Rio. José finds fame for his nightclub act, Panchito finds fortune for the ranch he wanted to buy and Donald found his smile again.
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