Andy's mother mistakenly takes the bag to the curb for garbage pickup.
She brings Woody home and plays with him along with her other toys, which are well-treated.Woody and Buzz help Lotso reach an emergency stop button, only for Lotso to abandon them and escape.The toys resign themselves to their fate, but are soon rescued by the Aliens operating an industrial claw.The rest of Andy's toys fall into the back of the truck while trying to rescue him, and a falling television lands on Buzz, restoring his memory and normal personality.The truck deposits the toys at a landfill, where they find themselves on a conveyor belt, leading to an incinerator.Lotso destroys the tag and says that toys are meant to be discarded, but an enraged Big Baby throws Lotso into the dumpster.
As the toys try to leave, Lotso pulls Woody into the dumpster just as the truck collects the trash.
Woody follows them, but is unable to convince them of the mistake.
Andy's toys are welcomed by the other toys at Sunnyside, and are given a tour by Lots-O'-Huggin' Bear ("Lotso"), Big Baby, and Ken.
Several other characters (such as Bo Peep, RC, Etch, and Wheezy) are only seen in flashbacks or briefly mentioned.
The character of Slinky Dog appeared to be in limbo after the death of his original voice actor Jim Varney on February 10, 2000, three months after Toy Story 2 was released. After Clark was cast to play Slinky Dog, the producers realized that Clark and Varney had coincidentally been close friends since they appeared in the 1989 film Fast Food, making the transition a lot easier.
Meanwhile, at Sunnyside, a group of toddlers play rough with Andy's toys.