After a failed attempt to nab the strangely elusive Talent Thief, the Winx select singing waitress Annabelle to be their show's first contestant.

Bloom has a dream where she finds Annabelle in a forest. When they are called by Wow! to find another talent, the Winx split into two groups: Bloom, Flora and Tecna pretend to be sick so they can search for Annabelle, while Stella and Aisha have Musa dress up as their upcoming talent for their Wow! episode. At the Frutti Music Bar, Evans and Gomez interrogate Roxy about Annabelle and she warns the Winx. They regroup at the club dressing room that showcased Annabelle, and discover one of her earrings. But a mysterious portal transports them to where Annabelle is and they learn that they now have a new fairy transformation called Dreamix. Although they fight off some local monster spirits, Annabelle is unable to enter the portal back to Earth and is instead sent to another location.

The Winx's next appearance on Wow! is interrupted by a report from New York City in which a crocodile monster (Crocodile Man) has been spotted near on a boat. Flora senses that a guy named Naoki is connected to this so the Winx girls head to Manhattan to find Naoki, who tries to escape from the girls but then finds himself being pursued by Crocodile Man. The Winx save Naoki and reveal to him that they are fairies.

The Winx have found a pocket watch that was dropped by Crocodile Man. They and Naoki try to capture Crocodile Man, but the latter proves to be very strong and elusive. The Winx discover that Crocodile Man is more interested in going after the watch than Naoki. Although Crocodile Man gets the watch and escapes through a portal, Tecna has placed a tracker inside that watch and they learn that Crococile Man has escaped into the World of Dreams.

Bloom contacts Annabelle and learns that she had found a similar pocket watch dropped by a guy who had broken into her apartment and then escaped. The Winx head to Paris to recruit a fashion design student named Sophie. Sophie is reluctant to join and dislikes Stella's style, so Stella suggests they have a contest to see who has the better style. During the contest, Stella encourages Sophie to design the dress of her dreams. Sophie is invited to have the Winx model her new design at a show. Crocodile Man kidnaps Sophie. Although they defeat Crocodile Man and rescue Sophie, they discover she is acting differently and Bloom gets a vision that the real Sophie is trapped in the world of dreams.

The Winx sneak into an exclusive fashion week party to look for the Sophie imposter. Bloom discovers the imposter is a shadow creature, but accidentally falls onto the party's cake, causing much embarrassment. The Winx return to the Paris fashion academy where they recruit office worker Nadine to try becoming a model. Nadine is invited by the fake Sophie to model, but the Winx confront Sophie and a bodyguard at the Eiffel Tower. As punishment for ditching the show, Ace has the Winx girls perform some activities that are not within their natural talents. Although Bloom surprises everyone with her singing, she accidentally knocks Ace's hairpiece off; Ace has had enough of Bloom's shenanigans and fires her.

Ace sends a new girl named Lorelei to replace Bloom as a talent scout on the show. The Winx find their next talent prospect, an apprentice chef named Vincenzo who has been trying to make his own creations but refuses to listen to his boss Tony or anyone else for advice. The Winx pair up with each of the participants in the competition as their assistants, and eventually encourage and guide Tony to make the right kind of food that he has been dreaming of. Meanwhile, Bloom makes her way to Annabelle's apartment to try to find the watch, but notices Evans is tailing her so she hides from her. Evans eventually finds Bloom and brings her in for questioning.

Detective Evans interrogates Bloom and reveals that she has the pocket watch that Bloom is looking for. Bloom tries to shake off Evans and Gomez with the help of Roxy and her dog Arthur while the other five Winx have to bring along Lorelei on the Winxmobile. Their next talent prospect is in Beijing: a kung-fu martial artist named Yu, but she has to face the Shaman in the finals. During the battle, Yu is kidnapped by the Shaman.

The Winx capture the Shaman, and learn that his master has been controlling the portals to kidnap the talent prospects. However, when Lorelei wants their attention, the Shaman escapes. The Winx head to London to find their next talent prospect: a girl named Madelyn who has been groomed to become a pianist but does not enjoy it. While some of the girls take care of Madelyn's family pugs, the others try to encourage her to follow her real dream. After some Sherlock Holmes-like searching, they find Madelyn in her tree-house and that her real desire is to play rock music on an electric guitar.

The Winx head to Santa Monica Pier on the direction of Lorelei's determination to lead the show. A new assistant, Smee, hypnotizes Ace into putting the girls in a parasurfing challenge race with a group of guys called the Sharks. Lorelei tries to follow but her boat breaks down and she is attacked by sharks (actually mind-controlled by Smee). To make things worse, the guy Sharks are actually zombie pirates. Although the Winx defeat the pirates, Lorelei discovers they are fairies and tries to tell Ace. However, Ace and the audience laugh at her, and Ace fires her from Wow! Meanwhile, Bloom and Roxy track down Evans and Gomez when Jim snatches the pocket-watch from them. They pursue Jim and recover the watch, but find it is broken.

Jim offers Bloom and Roxy a chance to get the pocket watch repaired. Bloom accepts and goes with him to Switzerland to find the Watchmaker, despite Roxy's reservations. Evans and Gomez follow them. Meanwhile the other Winx head there to scout a girl named Silke who is trying to win a snowboard jumping competition. But they discover Silke has no competition-level talent for snowboarding.

The Watchmaker refuses to see Bloom and Jim and locks himself in his home. Bloom and Jim fight Smee's zombie pirates, but are captured and sent through the portal. The other Winx discover that Silke's real talent is repairing mechanical watches and that she is the niece of the Watchmaker. They meet Evans and Gomez and find the pocket watch. After Silke disables the security system, the Watchmaker says he cannot repair the watch as it is magical and runs counter-clockwise, but Silke is able to fix it.

Bloom and Jim are brought to the Queen, who has masterminded the kidnappings of the kids and uses their talents for herself. The other Winx arrive but must navigate through the World of Dreams and battle the Shadow Creatures and the local plant life to get to the Queen, who is a formidable foe with her stolen abilities. Jim frees Bloom, who regains her power and together with the other Winx they defeat the Queen. They free the talents and make it back to the Wow! finale and Ace welcomes Bloom back. In the World of Dreams, Smee swears loyalty to Jim who is revealed to be Captain Hook turned young by the Queen, and who intends on re-conquering Neverland.