Everyone in Cuddlestown is getting ready to celebrate Chinese New Year. But when Amy goes down to the lake to hang up some lanterns for their parade, she is alarmed to see a dragon appear through the mist. She quickly runs back to town to warn everyone but is upset to find that no one believes her. The Bananas feel sorry for Amy. They don’t really believe in dragons either but they don't like to see their friend upset. They decide there’s only one thing to do. They'll try to find out just what sort of dragon Amy really saw.