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Elmo loves his blue blanket, and might never let anything happen to it. A tug-of-war together with his friend Zoe sends his blanket into a land, and Elmo in hot pursuit. Facing life without his cherished blanket, Elmo musters every one his determination and guts and heads off on a action-packed rescue mission that plunges him into Grouchland-a place full of grouchy creatures, stinky garbage and the villainous Huxley. On the way, Elmo finds an important lesson in sharing, understanding he was selfish with his friend and responsible for what happened.