John is sulking about some kids calling him names at school when Peter Pan comes flying into the Darling kids' room and takes them to Neverland to cheer John up. But they realise something is terribly wrong when Peter suddenly tumbles and he cannot seem to fly. At Neverland when everyone is playing, they chance upon a sweet and timid child called Loki whom John seems very suspicious of. Soon Loki becomes a part of the Lost Kids and everyone welcomes him with open arms except John who is onto Loki's game. Everyone gangs up on John and starts calling him names and making fun of him. John is determined to show everyone Loki's true colours. He decides to enlist Tiger Lily's help since everyone else seems to be turned against him. They soon discover that Loki is the creation of an unhappy child who went back to London and is wreaking havoc through Loki.It is upto to Peter, John and Tinkerbellt to find this sulky man to ensure Loki doesn't destroy the innocence of Neverland.