Dot and the Koala opens with the residents of a small Australian country town desperately wanting to lead more exciting, more modern lives. Major Percy Pig convinces the townspeople - a strange collection of haughty cows, hardworking horses and aggressive dogs - that the answer to their problems is a massive dam. The dam will provide the power to catapult the town into the 21st century. When the native animals - kangaroos, wombats and possums - realise the dam will destroy vast tracts of the countryside, open warfare erupts between the two groups.