The Toy Taker's true identity - Mr. Cuddles.

The Toy Taker, also known as Mr. Cuddles, was a misguided, thieving, anthropomorphic teddy bear who served as the main villain of Rudolph the Red-Nosed Reindeer and the Island of Misfit Toys. After his much-loved owner, Steven, apparently threw him in the trash, Cuddles became slightly deranged and ashamed. Wishing to save his fellow Christmas toys from the inevitable fate of "Outgrowth", the darkness of closets and attics, and the cold indignity of the trash heap, he put on a fedora, trench-coat, mittens, and wore stilts and used a magic flute (it is never mentioned how he got a hold of it) to hypnotize other toys into his clutches, and hid them in his secret hideout, located inside an iceberg.

After stealing the toys right out of Santa Claus' workshop, Rudolph, Hermey, Yukon Cornelius, the Abominable Snowmonster, and Clarice set out to find and capture the Toy Taker. He succeeds in stealing toys from Castaway Cove, but after plundering the Island of Misfit Toys, the heroes disguise themselves as toys and sneak aboard the blimp he uses as transport. After the heroes are discovered, Toy Taker sends them through a trapdoor. They fly back on board and seem to corner him, but he escapes to the top of the blimp, followed by Yukon. Yukon is thrown off the blimp by a passing Boomerang That Doesn't Come Back, only to be rescued by the Snowmonster below (who couldn't come aboard the blimp because he was "too...Ginormous!"). Rudolph and Clarice then scare the Toy Taker with the light from Rudolph's nose, prompting the hooligan to parachute into the abandoned Peppermint Mine. After a chase through the roller-coaster like mine, Toy Taker makes a run for it, but is lassoed by Yukon Cornelius (armed with dental floss borrowed from Hermey). His identity is revealed to Santa and his captors, and he tells his story.

Mr. Cuddles reforms when he hears that his banishment to the garbage heap was an accident. Steven had placed him in the box on the shelf in his closet to save his beloved childhood friend as a family heirloom, and was now trying to find him. He is repaired (his seams were coming undone at an increasing rate throughout the film) and given to the daughter of his former owner that same Christmas, returning all the toys he kidnapped.

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