Sailor Moon and Peter Pan in Neverland

It is World War II in the 1940s, and Wendy Darling has grown up. Her husband, Edward, is sent to fight in the war. Wendy tries to keep her children's spirits up with stories of Peter Pan, but Jane, her daughter, has become cynical under the pressures of the war, ignoring the stories her mother tells and unintentionally ridiculing her brother, Danny's faith in them. Jane has promised her father that she'll take care of her mother and family when he was gone. But when Wendy tells her that she must be evacuated to the countryside for her safety, Jane lashes out on her, and at Danny, which leaves Usagi and friends in a disappointment.

That night, Captain Hook, still seeking revenge against Peter Pan and Sailor Moon and the Sailor team, breaks into the Darling home, and kidnaps Jane while she is sleeping, believing her to be Wendy. Smee ties her up and gags her, and Hook flies back to Never Land on his ship to use as bait for Peter. Once in Never Land, he drops Jane into the waiting tentacles of "the beast" (a giant octopus), expecting Peter to also be devoured by it as he dives after Jane to save her, along with Tinker Bell. Peter rescues Jane, and the octopus tries to eat Hook instead but Hook is rescued by Smee. However, the octopus enjoys the taste of Hook so much (just like the crocodile) that he decides to go after him. Meanwhile, upon finding Jane is Wendy's daughter, Peter assumes she would like to follow in her mother's footsteps. He takes her to his home to be the mother for the Lost Boys, but Jane refuses, because she is more interested in getting back home. They try to teach her to fly, but she fails due to her rather pessimistic outlook. The boys then play a game of keep away with her, resulting in her notebook being destroyed and causing her to lash out angrily at the boys. In her anger, she states that does not believe in fairies, which is a death sentence for all fairies, then storms off, leaving Tinker Bell to die until Peter tells the boys they have to make her part of the group.

After Jane leaves them, she is approached by Hook, who tricks her with a deal. He promises to take her home and not harm Peter if she agrees to help him find his treasure. He gives Jane a whistle to signal him when she finds it. The Lost Boys search for Jane and eventually Peter finds her. Jane suggests they play a game of "treasure hunt". Peter and the Lost Boys show her the fun they have and she changes her ways. When Jane finds the treasure, she throws away Hook's whistle, refusing to help him. Peter and the Lost Boys make Jane the very first Lost Girl (as a coyote) and they celebrate. However, one of the Lost Boys finds the whistle and blows it. Hook and his crew arrive and capture Peter and the boys, but let Jane go as a thanks for "helping" them. Despite Jane denying that she wanted to help Hook in this way, Peter calls her a traitor for lying to him and tells her that since she said that she does not believe in fairies, Tinker Bell is dying.

Jane, realizing it is her fault, rushes to the Lost Boys' home, and her repentant tears and renewed belief revive Tinker Bell. They both hurry to the Jolly Roger, where they find the Lost Boys tied up and Peter (tied to an anchor) about to walk the plank. Jane saves him and with the help of "faith, trust, and pixie dust", she learns to fly and unties Peter. Hook's ship is sunk by the octopus, leaving him and the pirates to exit on a rowboat with the octopus pursuing them. Jane return homes to her family. After Jane apologizes to them for her selfishness, Wendy and Peter meet again for the first time in over thirty years. Though Peter is disappointed that she has grown up, Wendy assures him that she has not really changed. Tinker Bell sprinkles her with pixie dust, and Wendy shows that even as an adult she can still fly. Peter understands that though Wendy has grown up, she is still young at heart and still believes, and leaves after one last goodbye. Edward has returned from the army. The family is reunited as Peter and Tinker Bell fly off into the night.

Usagi and friends return back to London and face their old enemy Captain Hook.