Peter and his faithful dog, Harold, have traveled many miles in the dark unfriendly woods when they arrive at the family's new house. Peter doesn't like it. He wants to go back to their old one, but only Harold hears him. Peter and Harold are both in need of some new friends, and decide to make Lenny and Lucy out of blankets and pillows, who come to life and keep the scary things in the woods, where they belonged.