Somewhere in Europe, a young man named Poupelin (ププラン Pupuran) plays a song on his flute to hypnotize children, following him into a mysterious ship before sailing off into the sky. In Tokyo, Usagi Tsukino, Chibiusa, and the other girls bake cookies together at Makoto Kino’s apartment. Usagi ends up with cookies that look perfect but taste terrible; Chibiusa produces the reverse. Chibiusa sets out to give her cookies to Mamoru Chiba, but is stopped by a butterfly wing-shaped boy in strange white clothing standing outside the sweets shop. They befriend each other, and he causes some of the treats inside the shop window to dance by playing a tune on his flute before revealing himself as Perle (ペルル Peruru). Meanwhile, Usagi visits Mamoru with her cookies, and they argue over his strong and close friendship with Chibiusa. They hear a report on the radio about the mass disappearance of children all over the world. Around the same time, Chibiusa gives her bag of cookies to Perle before going their separate ways.
That night, Chibiusa wakes up, and begins walking through the city. Diana wakes Usagi, who along with the other girls, follow Chibiusa, and the other children. They save Chibiusa, but get into a fight with Poupelin, and his “Bonbon Babies.” Poupelin then hypnotizes the girls into seeing a Gingerbread House. In turn, Mamoru appears, and snaps the girls out of the spell. Queen Badiane (女王バディヤーヌ Jo’ō Badiyānu) orders Poupelin and her other henchmen Banane (バナーヌ Banānu) and Orangeat (オランジャ Oranja) to hurry up. Perle says that he no longer believes in her, but she orders that Chibiusa be captured. The ship lands, along with two others, in Marzipan Castle. When the doors are opened, the children run out into the darkness, except for Chibiusa. Looking into the shadows, she witnesses “Dream Coffins,” each containing a sleeping child. Badiane lifts her into the air, commenting on the power she senses from Chibiusa, and explains her purpose. In the castle’s center, a massive Black Dream Hole is forming, gathering the magical “sugar energy” of the sleeping children. Eventually it will overtake Earth, and all humans will enter into Dream Coffins.
Meanwhile, Perle leads the other Sailor Guardians to a flying ship of his own. He tells them that Badiane promised that the children would be happy and safe in her world of dreams and where they can remain children indefinitely, but he thinks also of Chibiusa, his friend. As they reach the castle, they are attacked, and after crash-landing fight Poupelin, Banane, and Orangeat, as well as three sets of Bonbon Babies. Just when the situation seems hopeless, the girls are saved by Sailor Uranus, Sailor Neptune, and Sailor Pluto. With this advantage, they are able to break the flutes of the three fairies, changing them into small birds. Afterwards, the Guardians infiltrate the castle and confront Queen Badiane, who has drained enough dream energy from the children, including Chibiusa, to create the Black Dream Hole. The power drain is enough to force all the Sailor Soldiers except Usagi into a half-transformation. Taking Chibiusa with her, Badiane enters the hole itself, and Usagi follows. Usagi then finds herself in Mamoru’s apartment, carrying Chibiusa. Mamoru lays her on the bed, then wraps his arms around Usagi and tells her not to worry about anything, just to stay there with him. She asks him again who is more important, herself or Chibiusa; he eventually tells her that she is. Usagi lifts Chibiusa in her arms once again, and eventually realizes that this experience is all just a dream.
As Usagi tries to flee, Badiane demands that she give back Chibiusa. When Usagi refuses, Badiane assimilates herself into the black dream hole and attacks her with fire. Hearing her mental cry, the other seven Guardians send their power and strength to Usagi, awakening Chibiusa and allowing them to finally obliterate Badiane with their Moon Gorgeous Meditation technique. After the battle, Marzipan Castle is destroyed, and with Perle’s help, the six Super Sailor Guardians and three Outer Sailor Guardians escape. The airships, each carrying children, return to Earth.
Later, at a beach, Perle gives Chibiusa his glass flute, telling her that he is the fairy who protects children’s dreams, and will always be with her, and Chibiusa kisses him goodbye on the cheek. As Perle flies away, the six Super Sailor Guardians and three Outer Sailor Guardians watch the sun rise.