After a failed attempt to nab the strangely elusive Talent Thief, the Winx select singing waitress Annabelle to be their show's first contestant.

Bloom has a dream where she finds Annabelle in a forest. When they are called by Wow! to find another talent, the Winx split into two groups: Bloom, Flora and Tecna pretend to be sick so they can search for Annabelle, while Stella and Aisha have Musa dress up as their upcoming talent for their Wow! episode. At the Frutti Music Bar, Evans and Gomez interrogate Roxy about Annabelle and she warns the Winx. They regroup at the club dressing room that showcased Annabelle, and discover one of her earrings. But a mysterious portal transports them to where Annabelle is and they learn that they now have a new fairy transformation called Dreamix. Although they fight off some local monster spirits, Annabelle is unable to enter the portal back to Earth and is instead sent to another location.

The Winx's next appearance on Wow! is interrupted by a report from New York City in which a crocodile monster (Crocodile Man) has been spotted near on a boat. Flora senses that a guy named Naoki is connected to this so the Winx girls head to Manhattan to find Naoki, who tries to escape from the girls but then finds himself being pursued by Crocodile Man. The Winx save Naoki and reveal to him that they are fairies.

The Winx have found a pocket watch that was dropped by Crocodile Man. They and Naoki try to capture Crocodile Man, but the latter proves to be very strong and elusive. The Winx discover that Crocodile Man is more interested in going after the watch than Naoki. Although Crocodile Man gets the watch and escapes through a portal, Tecna has placed a tracker inside that watch and they learn that Crococile Man has escaped into the World of Dreams.

Bloom contacts Annabelle and learns that she had found a similar pocket watch dropped by a guy who had broken into her apartment and then escaped. The Winx head to Paris to recruit a fashion design student named Sophie. Sophie is reluctant to join and dislikes Stella's style, so Stella suggests they have a contest to see who has the better style. During the contest, Stella encourages Sophie to design the dress of her dreams. Sophie is invited to have the Winx model her new design at a show. Crocodile Man kidnaps Sophie. Although they defeat Crocodile Man and rescue Sophie, they discover she is acting differently and Bloom gets a vision that the real Sophie is trapped in the world of dreams.