Smokey is sitting at home on Christmas Eve when Father Christmas arrives with a problem, so Smokey comes to the rescue with the help of Portia and Balou.

Portia is kidnapped and within a short time Smokey is grabbed by his ears and carried away too. He soon discovers why he and Portia have been transported to the Island of Rabbitina.

While out for his morning gallop, Smokey notices something strange. Silver the Seaman is concerned that there are fewer and fewer fish in the sea, but luckily Smokey devises a cunning plan.