The game opens with a celebration in the land of the dragons, where Spyro and his kin are celebrating the "Year of the Dragon", an event that occurs every twelve years when new dragon eggs are brought to the realm.[14] During the celebration, however, a cloaked rabbit girl, Bianca, invades the Dragon Realms with an army of creatures called Rhynocs and steals all of the Dragon eggs, bringing them back to the Sorceress, who scatters the eggs throughout several worlds. The worlds are split up into four realms, all of them are named after a time of the day, and types of geography; Sunrise Springs, Midday Gardens, Evening Lake, and Midnight Mountain.[14] Spyro, along with Sparx and Hunter, are sent down a hole to find the thieves and recover the dragon eggs.[7]
While pursuing the thief, Spyro discovers a realm once inhabited by the dragons, but long abandoned and forgotten. This realm is ruled by the Sorceress and her Rhynoc army; only a few creatures stand and fight against the Sorceress' rule. Spyro learns from one such inhabitant, Sheila, that when the dragons left the realm, the magic of the world began to dry up.[15] Spyro travels through each world in the forgotten realm, acquiring aid from the local inhabitants and rescuing the dragon eggs. It is revealed that the Sorceress is seeking not the baby dragons themselves, but merely their wings to concoct a spell that can grant her immortality.[16] Once Bianca discovers this, she feels sorry for the baby dragons, and defects to side with Spyro and his allies. Spyro eventually fights and defeats the Sorceress, and celebrations occur throughout the realm.
The Sorceress survives her battle with Spyro, however, and waits for Spyro with the last of the dragon eggs. Spyro and the Sorceress battle again where the Sorceress is finally defeated; Spyro returns all the baby dragons to the Dragon Kingdom.
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