In the time since saving the day after the foggy Christmas Eve, Rudolph has soon become the most famous reindeer of them all. Although generally happy to no longer be bullied and enjoying his budding romance with Clarice, he finds himself overwhelmed by the fame and believes it to be a shallow appreciation of the benefits of his nose rather than for actually him, and begins to long for a regular nose so he can live a normal life. Meanwhile, a shadow looms over the impending Christmas due to the actions of the Toy Taker, a thief that steals Christmas toys from people's homes. After King Moonracer requires a root canal dental treatment, Hermey - now a full-fledged dentist - is asked to come to the Island of Misfit Toys to do the treatment, with Rudolph deciding to come along as an assistant to get some time away from the North Pole. While they are gone, the Toy Taker completely robs Santa's warehouse. On the return trip the next day, a storm shipwrecks Rudolph and Hermey on Castaway Cove, an ice habitat run by a
hippopotamus fairy named Queen Camilla, who fixes toys and keeps them safe. As thanks for helping them, Rudolph and Hermey agree to have Santa form a similar partnership with her as he has with King Moonracer. In return, Camilla agrees to give Rudolph a normal nose at a later date. Rudolph and Hermey return home three days ahead of Christmas, where the former and Clarice finally confess their feelings, causing Clarice to be able to fly. After they begin a relationship, however, they discover the Toy Taker's crime. Investigating with Santa and the other elves, they find stuffing and odd footprints. Rudolph deduces the Toy Taker will strike either Castaway Cove or the Island of Misfit Toys next, so he, Clarice, Hermey, Yukon and the
Bumble devise a plan to disguise themselves as toys and hijack the blimp that the Toy Taker uses. Meanwhile, the Toy Taker keeps the toys in a frozen volcano, where he claims he is saving them from the truth that children outgrow their toys and throw them away. Unable to arrive in time to save Castaway Cove's toys, Rudolph's group sets their trap on the Island of Misfit Toys. They manage to sneak aboard the blimp with the Misfit Toys except for Bumble, who is too large to fit into the blimp, so he follows on an ice flow. Eventually, the Toy Taker realizes that they are intruders, and dumps them out of the blimp. They fly back and Yukon pursues the Toy Taker around the blimp, but his shoes puncture holes, and he falls off the blimp after losing balance, but he is caught by Bumble. Hermey pilots the blimp back to Christmastown, and he is saved by Bumble before crashing. The Toy Taker attempts to escape by heading into Yukon's Peppermint Mine, with Rudolph and Clarice following him. A mine cart chase ensues, ending with Rudolph saving the Toy Taker from falling to his death. As the rest of the group and Christmastown residents arrive, the Toy Taker tries fleeing through a cave, but is caught by Yukon and Rudolph using Hermey's dental floss. After removing the Toy Taker's coat and hat, the figure is revealed to be a ripped
teddy bear on stilts named Mr. Cuddles, who explains that he used to belong to a boy named Steven who outgrew him and he was eventually thrown away. Afterward, he became the Toy Taker in an effort to save other toys from meeting the same fate. Santa explains that although it is true that some children outgrow their toys, he knew that Steven was looking for him. Rudolph and his friends agree to bring Mr. Cuddles to Queen Camilla to repair him and cheer him up. Rudolph also decides to keep his nose, realizing how useful it is. Mr. Cuddles returns all the toys ahead of Christmas Eve, and later he accompanies Santa and Rudolph on their annual voyage. Along the way, Santa tells him that Steven intended to save him as a family gift, and explains that he is all grown up now with a child of his own. Santa places Mr. Cuddles in the bed of Steven's young daughter, who awakens and embraces him. Steven walks into the room to check on his daughter and smiles as Santa, Rudolph, and the other reindeer fly away into the night. ==Cast==