At Dimmsdale Elementary School, Mr. Crocker pulls down a screen at the head of his class and a projector reveals his "F Tracker". Timmy has gotten his 5,000th F. Crocker asks to tell Timmy what he's won, and like a game show hostess she reveals that Timmy has "won" an all-expense paid day at for one. Mr. Crocker shows the camp and it's purpose on the projector screen. The movie shows Dolores-Day Crocker, his mother, running a grueling obstacle course early in the morning, and then fighting a bear. Timmy asks how is supposed to help his grades. Crocker whispers to himself that its all just a ruse to capture Timmy alone with his fairies. Timmy says that his parents would send him to military school.
However, back at Timmy's house, his are jumping up and down (on a trampoline) in excitement because they want Timmy gone. Timmy runs up to his room for help from his , only to find that it has become a battlefield. was trying to get Poof to take his nap, but he turned into a sleep deprived battle plane, and started shooting push pins all over the room. Wanda is brewing up a magical formula, she mixes boring elevator music, a book on the Dewey decimal system, and a six hour documentary on yarn, to create a formula that could put anybody to sleep. Meanwhile downstairs Mr. Crocker has arrived (he is dressed in a military uniform he made up) and has Timmy's parents sign the permission slip. Timmy sees this and runs back to his room for help, but Poof has transformed into a robot creature and is wreaking havoc in Timmy's room. Wanda tries to give Poof the bottle of formula but he slaps it away.
The sleeping formula flies out of Timmy's room and spills its contents into glasses of lemonade Timmy's parents drink the lemonade and immediately fall asleep. Timmy sees this and wishes that his parents would wake up and change their minds about the permission slip, but before and Wanda can grant the wish, Poof steals their wands. Wanda is then captured by Poof, still in robot form, so Timmy is forced to take Cosmo with him for help. Timmy shows Cosmo what happened to his parents, and Cosmo suggest that they use them as puppets to trick Crocker into giving back the permission slip.
In short, Timmy, Cosmo, and Wanda run back into Timmy's room, which has become like houses in Tokyo. A three purple monster rampages through the city, breathing fire all over the place. Timmy asks why Poof has gotten so big, and Wanda says that if Poof doesn't take a nap soon he will turn into bigger monsters until he explodes. Timmy drives with his fairies in a vehicle holding a large baby bottle with the sleeping formula inside. The bottle is fired inside the middle head's mouth and Poof transforms back to normal and falls asleep.
Wanda catches Poof, and a Japanese kid thanks Timmy for saving their city which mysteriously appeared inside his bedroom. Timmy rushes back to the living room where he returns to see Mr. Crocker finishing a long story about his life to the Turners, and then vowing to start a new life as a ninja ballerina cat burglar. Timmy makes Mr. Crocker up as a puppet just as his own parents wake up. Mr. and Mrs. Turner wonder why the permission slip has been ripped up. Timmy uses Crocker as a puppet to tell his parents that he is a good kid that they should let him play lots of video games. Then Mr. and Mrs. Turner see the left over lemonade as Mr. Crocker is leaving and drink from it, falling asleep again. Timmy and his fairies take Mr. Crocker into a bus, and he is then dragged to Cincinnati.