Two siblings, Max and Emmy, find an enchanted dragon scale capable of transporting them to a whimsical fantasy land inhabited by colorful anthropomorphic dragons by reciting a rhyme. They befriend four friendly dragons Cassie, Ord, Zak, Wheezie and Quetzal.
Zak and Wheezie have had enough of always having to do what the other wants to do and wish they became separated from each other, so Quetzal gives them crystals that separates them. However, when they build a musical playground, they discover that they actually need each other more than previously thought.
Quetzal is sick and cannot help the gang make their kites, so the gang decides to surprise him by making their own kites.
The Dragon Fair has come to town and Zak and Wheezie are in the Sackberry Toss, but their biggest challenge is catching it. Luckily, Emmy helps them get better at their catching by practicing with a ball.
Cassie is excited about the School-in-the-Sky Parade, but she gets very upset and feels left out when her name is not picked and realizes she cannot ride on the Book Float. She feels sorry for herself until she meets Cosmo, a flower who also got rejected from the parade.
Max is nervous about his first day of school until Emmy takes him to the School in the Sky where Quetzal advises them, "When you're stuck, don't give up! Try something new".
The kids and dragons go on a quest to save Max's favorite comic book superhero, Mondo Mouse, from the Catnapper, using his "Mondo Mouse" comic book and 3D glasses.
