Timmy runs away from home so his parents could have the same things in life as the Dinklebergs, and meets the carnies at a carnival. The carnies are fairies (except for the crocodile, who is real) that help kids who run away from home. Timmy realizes his parents actually do miss him and returns home, finding out that the carnies were working with Cosmo and Wanda.

Timmy Turner has kept his fairy godparents Cosmo and Wanda a secret for one whole year thus far. He receives a special gift, the "Fairy-versary muffin", which can grant any user one rule-free wish. With Timmy's school teacher Mr. Crocker constantly spying on him to prove that fairies indeed exist, the Fairy-versary muffin falls into other people's hands, eventually ending up in Mr. Crocker's. Using the muffin, Mr. Crocker captures Timmy's fairies and wishes for an oppressive world ruled by him, transforming Dimmsdale into Slavesdale. Now, Timmy and his fairies must get the muffin back and save Dimmsdale. This is the very first Fairly Odd movie in the series.