Jacob Two-Two Meets the Hooded Fang

The film opens in Jacob Two-Two's Montreal home where he runs from room to room, trying to get his siblings and parents to notice him. Each family member dismisses him for being 'too small' to join in or help with tasks. His father finally suggests he go to the corner store to buy some chocolate ice cream, hoping to keep him occupied.

Jacob heads to the corner store and encounters adults looming over him as he asks for two quarts of chocolate ice cream. Mr. Cooper teases him and the policeman plays along, pretending to log a charge for insulting an adult. Jacob panics, runs away, and hides in a park, where he eventually falls asleep.

Jacob wakes up in a jail cell and meets his lawyer, Mr. Loser. In court, a hostile judge belittles him as the jury finds him guilty and sentences him to a long, ominous period in prison. The room fills with screaming adults as the verdict is read, setting a grim tone for what follows.

A sudden interlude sees Jacob's siblings appearing as 'The Intrepid Shapiro' and 'The Fearless O’Toole' to appeal the verdict. They warn the judge that cruelty to children is illegal and promise to intervene if Jacob is harmed. Their sudden appearance unsettles the courtroom and creates a glimmer of hope for Jacob.

Master Fish and Mistress Fowl escort Jacob toward the prison island, describing a world of smog and danger. The warden, The Hooded Fang, is introduced as a feared figure who hates children and longs to maintain his terrifying reputation. Inside the prison, Jacob notices gray-skinned children begging for food as he is sent to a deep cell.

In the morning, Mister Fox, the head guard, leads Jacob to a shower room that doubles as a freezer and gives him a new uniform. After the cold wash, a technician checks behind his ears and discovers the jewel-like tracking device given by Child Power, which Fox promptly takes for himself. Jacob is then brought to the dining hall where the gray children reveal their environment and fears.

The prisoners explain that the sun is obscured by thick smog, turning life gray. The Hooded Fang returns and awards Mister Fox with a 'Rotten Child Award' for his undercover sabotage plan, ordering him to target toys in the city. Jacob grows worried that the tracking device is out of reach and that Child Power cannot locate the other children.

Child Power learns that the tracking device has moved to a city toy shop, signaling Mister Fox's mission. They fear Jacob might have drowned or been eaten by a fish, and the absence of the jewel deepens their concern. The plan shifts to locating Mister Fox and stopping the sabotage from within the system.

Back in his cell, Jacob receives candy-laced notes and endures the Hooded Fang's attempts to break him. He refuses to scream or submit, insisting on his two-two rhythm. He writes a note and tries to persuade the warden to deliver a message to Child Power, signaling a potential escape route.

The Hooded Fang reluctantly delivers Jacob's note, and Child Power confronts Mister Fox in the toy shop. The siblings overpower him with help from Jacob's earlier plan, vowing to take him back to the prison. They poison the crocodiles that guard the sea route as a route to freedom, challenging the warden's control.

Back at the prison, the children unleash a rebellion by destroying the smog-making equipment and blinding the adults with sun. The Hooded Fang remains the only adult who doesn't cower, proving that he was more a big kid than a ruthless tyrant. The prisoners begin to regain control as the children press their advantage.

When Child Power reaches Jacob with news of their success, he realizes they have started listening to him for the first time. In a sudden turn, Jacob is awakened by his father and finds himself back under the park's play structure. He embraces his family, and they leave the park hand in hand, suggesting the adventure may have been a dream or a mental journey that changes him.