While circus animals are being transported along with Thomas, Twilight and their friends (along with Spike and Crysta), Mrs. Jumbo, one of the elephants, receives her baby from a stork. The baby elephant is quickly taunted by the other elephants because of his large ears, and they nickname him "Dumbo". Thomas and Twilight promise Mrs. Jumbo that if anything happens to her (like being locked up for a really long time), they and their friends will take great care of Dumbo and they won't anything bad happen to him. When Mrs. Jumbo hears this, she was very pleased and says that she will trust them.
Once the circus is set up, Mrs. Jumbo loses her temper at a group of boys for making fun of her son, and she is locked up and deemed mad. Dumbo is shunned by the other elephants and with no mother to care for him, he is now alone, except for Thomas, Twilight and the others as guardians/protectors and friends (because they already promised Mrs. Jumbo that they will take great care of Dumbo for her) and a self-appointed mentor and protector, Timothy Q. Mouse, who feels sympathy for Dumbo and becomes determined to make him happy again.
The circus director makes Dumbo the top of an elephant pyramid stunt, but an idea from Luke to make Dumbo's ears tied up causes the stunt to go wrong, injuring the other elephants and bringing down the big top. Dumbo is made a clown as a result, and plays the main role in an act that involves him falling into a vat of pie filling. Despite his newfound popularity and fame, Dumbo hates this job and is now more miserable than ever. Feeling very guilty, Luke blames himself for his own idea to tie up Dumbo's ears and his fate as a clown and he thought he had let Mrs. Jumbo down, but Thomas, his friends, Twilight, her friends and Crysta comfort him and say that they're all to blame for Dumbo as his special friends and they all thought they had let Mrs. Jumbo down, which cheers up the little green engine.
Now to cheer Dumbo up, Timothy, Thomas, Twilight and the others take him to visit his mother (earlier, Thomas, Twilight and the others decided to keep what happened to Dumbo a huge secret from Mrs. Jumbo). On the way back Dumbo cries and then starts to hiccup so Timothy decides to take him for a drink of water from a bucket which, unknown to him, has accidentally had a bottle of champagne knocked into it. As a result, Dumbo and Timothy become drunk and see hallucinations of pink elephants.
The next morning, Dumbo, Timothy, Thomas, Twilight and the others wake up in a tree. Timothy wonders how they got up in the tree, and concludes that Dumbo flew up there using his large ears as wings. With the help of a group of crows, Timothy, Thomas, Twilight and the others were able to get Dumbo to fly again, using a psychological trick of a "magic feather" to boost his confidence.
Back at the circus, Dumbo must perform his stunt of jumping from a high building, this time from a much higher platform. On the way down, Dumbo loses the feather and Timothy tells him that the feather was never magical, and that he is still able to fly. Dumbo is able to pull out of the dive and flies around the circus, finally striking back at his tormentors as the stunned audience looks on in amazement.
After this performance, Dumbo becomes a media sensation, Timothy becomes his manager, and Dumbo and Mrs. Jumbo are given a private car on the circus train. Thomas, Twilight and their friends took off to another adventure.
- Spike (MLP) and Crysta guest starring in this film.
- When they first arrive at Florida at the beginning of this movie, Thomas, Twilight, their friends, Spike and Crysta are all able to fit inside the elephant car so they all can see Mrs. Jumbo's new baby.
- This film takes place before CoolZDane's film Danny Goes to FernGully: The Last Rainforest (which Crysta will see Timothy Q. Mouse, Jim Crow and his Brothers again).