Baloo finds the legendary "Panda-La" (a reference to Shangri-La), a mystical place, where he is warmly received. The reception, however, turns out to be a ruse, as Panda-La's inhabitants decide to attack Cape Suzette.

Baloo saves Kahn's life and in turn Kahn promises Baloo anything he wants. Trouble soon follows when Baloo lets his greed get the better of him!