In this all new adventure, a diminuitive lord named Farquaad has allied himself with the Villain League and is conquering the fantasy worlds of Disney so that his kingdom of Duloc, a twisted counterpart to Disney Castle, may rule supreme, with him and the captured Princess Fiona ruling it. Spyro and all of his Disney Fantasy creature allies must team up with their Dreamworks counterparts, including a sour ogre named Shrek, to save the galaxy from the wrath of Farquaad
and Queen Grimhilde's Disney Villain alliance of Captain Hook, Lady Tremaine, Foulfellow & Gideon, the Coachman, Gothela, Willie the Giant, the Queen of Hearts, Cruella De Vil, Maleficent's Goons, Madam Mim, Prince John, Ratigan, Gaston, Mozenrath, Frollo, Shan Yu, Yzma, and Marina Del Ray. All the while, Shrek and Fiona keep getting closer and closer in love with each other...
- The Disney Villains featured above have earlier appeared as stock footage reinforcements, but now they all have importance to the story and have new battles & defeats in this movie.
- Even though Maleficent will appear in Spongebob's Adventures of Shrek, she will appear in her dragon form in the very end to fight Dragon, before getting slain by Spyro's light blast and eating Farquaad as she falls to her doom.
- This is going to be a flashback story of how Spyro and the Louge first met Shrek and Marty's cousin Donkey before they and Puss in Boots become lougers after Spyro and Friends in Shrek 2 and how Farquaad became one of Spyro's new enemies.