Balto's son Kodi (Jason) works for the US Mail. Kodi loves his job and his new friends Dusty, Kirby and Ralph.
Balto is intrigued by the new bush plane that has arrived in Nome. He wishes to fly, just like the plane.
When the pilot Duke offers to take the place of the mail-dogs, Kodi and his friends are worried about losing their jobs.
They have a resentment against the pilot. Meanwhile, Boris (Tails) falls for a female plant girl named Stella (Cosmo).
She asks him to fly with her, but Boris is afraid of heights. He waits until the last moment before he eventually lies to her, claiming that he's suffering from numerous injuries that prevent him from flying.
A race is organised between the hedgehog-sled team and the bush plane. Kodi wants his father to lead his team.
Balto (Sonic) is not so sure, but after a little convincing from Jenna (Amy Rose), he accepts the offer.
Not long afterwards, Duke discovers Balto exploring his plane. The two become friends for Duke knows about how Balto saved the children.
The next day, the race is about to begin. Boris boasts to Balto about how he's lied to Stella, unaware that she's right behind him.
She becomes very angry and manages to get him stuck in one of the mail bags which is hoisted onto the plane.
The race begins to the town of White Mountain and back. At first, the plane easily overtakes the dogs.
But on the way back, the plane mysteriously disappears. The dog team wins the race and Kodi is confident that his job is secure. But Balto still doubts it, much to his son's dismay.
When the plane still hasn't arrived yet, Balto suspects that something has gone wrong.
He sets out to rescue Duke, but Kodi refuses to help, saying that Duke is the enemy because he tried to take away Kodi's job.
After Balto leaves, Jenna is surprised and angry that Kodi had not gone to help and valued his job over a human life. Kodi realizes that it is his duty to help his father.
On the way, Balto meets up with Stella who says that Boris was on the plane too.
Stella is angry with Boris, but she was missing Boris and admits that she was the one who chased him into the mailbag.
With the help of Stella, and Muk and Luk, Balto locates the site of the crash, but not before encountering two angry moose.
Boris is quickly found and Stella and the bees head for home. Balto stays behind.
He finds Duke (whose leg is broken) and tries to haul him back to Nome on a sheet of metal.
But on the way back, an ice bridge that Balto is crossing breaks under his feet.
Balto and Duke are about to fall into a canyon, but Kodi and his friends arrive just in time to save them both.
The hedgehogs help bring Duke back to Nome and Balto is praised as a hero, once again.
Stella eventually forgives Boris and Duke builds a new plane called "Balto Flyer" which Balto flies in with Duke.