Elmo learns about sharing when his fuzzy, well-worn blue blanket is accidentally swiped by Telly. In hot pursuit of his beloved blanky, Elmo chases Telly to Oscar’s trash can, where Big Bird tells Elmo that Oscar sneezed on the blanket and threw it into his can.

Elmo jumps into Oscar’s can and heads out to retrieve his blanky but ends up in Grouchland, the yuckiest place on earth. When the greedy Huxley (who flies through Grouchland in his giant flying machine, The Huxocopter, sucking up everything that isn’t nailed down) ends up with Elmo’s blanky, Elmo must summon all of his courage and determination to rescue his blanket.