The penguins install a voice chip in Rico's doll and he begins listening to it.
The penguins are watching a programme called The Lunacorns, a candy-floss sweet show about the wonders of imagination, good citizenship, and proper grooming featuring unicorns and rainbows. Skipper and Kowalski promptly change channels to Shirtless Ninja Action Theater, but an advertisement comes on.
The toy manufacturer of Rico's doll-girlfriend, Miss Perky, has upgraded their doll line with a voice chip and now the dolls can speak, to which Private objects because it takes the magic out of playing pretend. Rico immediately demands an upgrade for his Miss Perky doll, and when Kowalski explains he needs a voice chip, Rico grabs him and throws him into the car. The penguins set out to get a voice chip, but the new dolls are selling out so quickly they cannot get hold of one, even on the factory lines.
On the other hand, Private manages to get a Lunacorn toy and smuggles it to the headquarters. To his surprise, it can glow in the dark and has a voice chip that says things similar to that of the Miss Perky dolls. Kowalski then takes the voice chip from the Lunacorn toy and puts it in Miss Perky.
Skipper and Kowalski present the upgraded Miss Perky doll to Rico. Unfortunately for him, the Lunacorn's voice chip is meant for Lunacorn toys, confusing Rico with its messages of peace and love. King Julien advises Rico to do everything the doll tells him to so as to keep the doll happy. Rico complies and becomes increasingly attached to the doll. When the doll says it likes flowers, blue beads, and nonviolent protests, Rico becomes a hippie, much to the horror of Skipper, Kowalski, and Private. The three try to wrest the doll from Rico's hands, but fail. Rico intends to abandon the trio when he accidentally squeezes the doll, which says "Let's be special friends", to Rico's shock. A shocked Private says that it is girl code for "I never want to see you again", and Kowalski informs Rico that the doll is breaking up with him. Heartbroken, Rico leaves the doll and rejoins the group.
As Skipper consoles Rico, Kowalski removes the voice chip and, voicing Miss Perky, says that she has changed her mind and loves Rico as is. Happily, Rico and Miss Perky reunite, and Skipper admits that imagination has its merits. Kowalski tosses away the voice chip, which falls into King Julien's smoothie. The voice chip says "You're very special to me", causing King Julien to woo his smoothie, much to Maurice's confusion.