A dark and stormy night prevents Katie Beagle from leaving the magical playroom where she babysits Lamby Lambpants, his best friend Snout and their lovable Chinese puppy dragon Jonesy. Inside Katie's backpack is an old, tattered patchwork teddy bear, who looks more like Frankenstein's monster than a cuddly stuffed animal. Things get pretty bad when the big storm knocks out the power, turning off the lights. Things get worse when the ragdoll bear magically comes to life and goes after Jonesy. At first, Lamby and Snout try to stop the frightening Zombie Bear from trying to eat their puppy dragon's brain. But when they learn that things aren't what they seem, Lamby and Snout realize they misjudged the old teddy bear.