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In Spain 1519, two con artists, Tulio and Miguel, along with Hubie, Marina, Rocko, Petra, Beanie, Timmy, Pikatwo, Bonkers and Fawn (who are now married) win a map to the legendary City of Gold, El Dorado, in a rigged gambling match (though ironically they end up winning the map fairly). After being accused of cheating with loaded dice, the two evade capture with Hubie and his friends while being chased by a bull and hide in barrels, which are shortly loaded onto one of the ships to be led by Hernán Cortés  to the New World. During the trip, they are caught as stowaways, but manage to break free and take a rowboat with the help of Cortés' horse, Altivo. They land at an unknown shore at the edge of Mexico, and Miguel begins to recognize landmarks stated on the map. The map leads them to a totem marker outside of a waterfall where a young woman approaches them, chased by a number of guards. The guards see the image of Tulio and Miguel riding Altivo as the same on the totem, and believing them to be gods, escort them and the woman under the falls and into El Dorado, truly a city made of gold.

Tulio, Miguel, Hubie, Marina and their friends are brought to the city's elders, Chief Tannabok and wicked high priest Tzekel-Kan. While Tannabok warmly welcomes them to the city, Tzekel-Kan mainly sees them as a way to enhance his own standing. Tzekel-Kan also believes that with the arrival of the gods comes "The Year of the Jaguar", a year in which the city will be purged of all wicked people. Tulio and Miguel begin to argue on what to do. Everyone is convinced they are gods when as a volcano is beginning to erupt, Tulio yells at Miguel to stop, and the volcano suddenly stops. After celebrations offered by both Tannabok and Tzekel-Kan, the group is taken to private quarters along with the woman they met earlier, Chel, who has seen through their ploy but offers to help maintain it as long as they give her a share of the gold and take her with them when they leave. Tulio tells Tannabok the next day that they are only here for a visit, but will need a boat to leave the city with the gifts the city has showered upon them.

Tannabok says it will take them at least three days to construct a vessel to carry both them and the gifts given to them by the people of El Dorado. Chel encourages Miguel, Hubie, Marina and their friends to continue to explore the city while she tries to get close to Tulio. Miguel and Hubie find the streets empty and sees and old man being punished by a guard, who tells him Tzekel-Kan had ordered the streets cleared to prepare for a sacrifice by gods orders. Miguel begins playing a guitar and he, along with Hubie and his friends begin to bond with the people. When Tzekel-Kan sees Miguel, Hubie and the others playing a ball game with children, he demands that the gods play against the city's best players. During the match, Tulio, Miguel, Hubie, Rocko and Bonkers are clearly over-matched, but Fawn replaces the ball with an armadillo named Bibo, allowing them to cheat and win the game. However, when Tzekel-Kan offers to have the defeated players put to death and tell them they must punish the wicked, Miguel sees that no one there is evil and orders him to leave the city saying the gods will speak for themselves.

As he is leaving, Tzekel-Kan sees a small cut on Miguel's forehead, and realizes that they are not gods because gods do not bleed. Tzekel-Kan conjures a giant stone jaguar to chase them through the city. Tulio, Miguel, Hubie and his friends manage to outwit the stone jaguar, causing both it and Tzekel-Kan to fall into a giant whirlpool, thought to be the entrance to Xibalba, the spirit world. Tzekel-Kan comes to outside El Dorado, where Cortés and his men are searching for gold. Thinking Cortés is a true god, Tzekel-Kan quickly offers to lead them to El Dorado. With their boat completed and loaded with treasures, Tulio, Hubie and his friends are ready to leave but Miguel announces that he will be staying because he finds the city peaceful. As Tulio, Chel, Hubie, Marina and their friends start to leave, they spot smoke on the horizon, realizing that Cortés and his men are approaching the city with the help from Tzekel-Kan. To protect the city from the Spanish troops, Tulio determines they can use the boat to slam against rock formations under the waterfall path that will cave in and block access to the city.

The city residents pull down a large statue to create a wave to propel the boat, but Tulio cannot get the sails up to give the boat enough speed to avoid the statue. Miguel forgoes his chance to stay in the city and jumps into the boat with Altivo to finish hoisting the sails. The boat clears the statue in time, and Tulio's plan is successful; though the boat and its treasures are lost, the entrance to El Dorado is sealed for good. Tulio, Miguel, Chel, Altivo, Hubie, Marina and their friends hide as Tzekel-Kan brings Cortés and his men towards the waterfall. Once Tzekal-Kan finds out that the entrance has been blocked, an angry Cortés takes this as a lie. Cortés and his men then march away with a humiliated Tzekel-Kan in their hands. Tulio and Miguel though disappointed they lost their treasure, take off in a different direction for a new adventure, unaware that Altivo still wears the golden horseshoes he was outfitted with in the city.

As Hubie and his friends depart to visit Pooh Bear, Marina notices that she is wearing a golden flower on her head. Hubie presents her with her real rose, and Marina throws the gold one into the ocean.

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