E.B. foils Carlos’ coup d’etat, during which Fred saves the life of his father, Mr. Bunny.
E.B. and his father reconcile their differences, and E.B. tells him that, while he still intends to become a drummer, he will do his duties as the new Easter Bunny as well, so long as Fred can share the job with him (Fred earlier told E.B. that he would be the Easter Bunny if E.B. wouldn’t, so E.B. put him through a training regimen and discovered that he had genuine talent for the work). Grateful to Fred for saving his life, Mr. Bunny accepts E.B.’s proposal and names him and Fred co-Easter Bunnies.
Fred shows off his new job to his family, which thrills them because not only does he now have a job, but one of the greatest jobs imaginable. Carlos ends up pulling the egg sleigh, and his more affable sidekick Phil is made the new head of the Easter Chicks.
E.B. has a successful audition for Hoff Knows Talent, and accepts David Hasselhoff’s (himself) invitation to come to a live taping of his show on Saturday night (E.B. talks during this despite being warned by Fred [James Marsden] of the potential consequences that could befall him if he did, but Hasselhoff is not surprised by his ability to speak since he has a talking car, K.I.T.T., for a friend).
Outside, as E.B. and Fred are about to go their separate ways, E.B. notices the Pink Berets close by, and he alerts Fred to their presence. As they escape them, he confesses to Fred that he isn’t the Easter Bunny and that he had turned down the job when it came time for him to inherit it, which surprises Fred because he thinks it would be a great job to have. E.B. asks for his protection from the Pink Berets so he can make the TV show.
That night, Fred watches his sister Alex (Tiffany Espensen) perform in a Easter pageant at her school, with E.B. hiding in a satchel. As E.B. pops out and complains to Fred about Alex’s awful rendition of “Here Comes Peter Cottontail”, he sees three bunny shadows hopping along a wall. Believing that the Pink Berets have followed him here, he dashes out onto the stage and disrupts the show. Fred grabs hold of him, and E.B. sees that the shadows actually belong to some kids in bunny costumes. To cover for E.B.’s ability to talk, Fred and E.B. proceed to feign a ventriloquist act, and they lead everyone in singing “I Want Candy,” unintentionally upstaging Alex. Though Fred gets chewed out by his father and Alex over this, the experience inspires him to become the new Easter Bunny.
Back at the mansion, Fred tells E.B. all about how he saw his father, Mr. Bunny, when he was a boy, and that he realizes now, after seeing his father and then meeting him, that he wants to be the Easter Bunny. E.B. is very skeptical of this, but in the end decides to train him, feeling that he owes him for taking him to the audition. During the training regimen, he finds Fred possesses genuine talent for the work.
The morning of the TV show, E.B. spots the Pink Berets entering the mansion’s grounds. Desperate to get his chance to drum, he puts his clothes on a turkey and puts it in a boiling pot to make it look like Fred killed him. He then gets out of the mansion and into the waiting limo that Hasselhoff had sent to pick him up. As he goes, he initially worries about Fred’s well-being, but quickly and selfishly puts this worry aside to focus on his opportunity at stardom. After finding the clothed turkey, the Pink Berets tranquilize Fred and take him to Easter Island.
Fred awakes inside the Easter factory, and Carlos tells Mr. Bunny that Fred has killed E.B. He then has the Pink Berets show him the turkey in the pot, and Mr. Bunny buys the lie, despite Fred pointing out that that was a turkey in there. Moments later, Carlos puts his coup d’etat into action. He first tricks the other rabbits into going into the egg painting room for a funeral service for E.B. and locks them in, and then he encases the Pink Berets in chocolate and has the other Easter Chicks get the Egg of Destiny away from Mr. Bunny and over to him.
Meanwhile, minutes before he is about to go on stage, E.B. gets scolded by his conscience in the form of his reflection for abandoning Fred. E.B. then meets up with Hasselhoff and has a chat with him, telling him about what he did and how Fred could be in real trouble. Hasselhoff tells him that he must go to Fred. E.B. heads back to the mansion, but finds no one and nothing there except a discarded blow dart on the floor. Realizing that the Pink Berets have captured Fred, he heads to Easter Island.
Carlos ties up Fred and Mr. Bunny inside a big basket and prepares to lower them into a vat of molten candy. Before he can, E.B. shows up, and as he gets confused over what is going on, Carlos has the chicks trap him in gummy candy and put him in the chocolate bunny carving line. After commencing with lowering Fred and Mr. Bunny into the molten candy, Carlos makes for the egg sleigh’s hangar, and along the way, he absorbs the Easter powers and turns into a big chick/bunny hybrid. Fred soon discovers that his bonds are made of black licorice, so he chews through them and then frees Mr. Bunny, and they safely get to the ground. E.B. dodges all of the carving saws except for the last ones, which cut him loose, and then he heads after Carlos on his father’s urging.
E.B. meets up with Carlos and tries to fight him, but Carlos easily beats him up. Carlos then hops into the egg sleigh to get ready to make the Easter deliveries (which all consist of food that chicks like and not candy), with his affable sidekick Phil guiding the Easter Chicks with lighted wands. Knowing that Phil loves to listen to him play the drums, E.B. begins playing an improvised set of bongo drums, and Phil finds himself uncontrollably driven to dance to the beat. This causes him to give the wrong signals with the wands, sending the sleigh flying all over the hangar and then crashing to the ground, subduing Carlos and sending the Egg of Destiny into E.B.’s paws.
E.B. heads back to his father, and they hug and reconcile their differences. E.B. tells his father that, though he still intends to become a drummer, he will do his duties as the new Easter Bunny, too, so long as Fred becomes one as well. Grateful to Fred for saving his life, Mr. Bunny has Fred touch the Egg of Destiny at the same time as E.B., and he declares them co-Easter Bunnies. They then set out to make the real Easter deliveries.
The next morning, Fred visits his family for brunch, and he shows off his new job to them by having them see E.B. and the egg sleigh. His family is initially surprised, but they especially his father quickly give their approval, because not only does he now have a job, but one of the greatest jobs imaginable. He and E.B. then take off, where it is shown that Carlos now pulls the sleigh and that Phil is the new head of the Easter Chicks.
After the credits, we see Fred and E.B. in China, visiting the woman that tried to hurt Mr. Bunny when he attempted to deliver candy to her once. Fred delivers the candy this time around, and she is much more receptive to him. Fred then tells E.B. in Mandarin that he learned from her that she thinks Easter is cool, but talking rabbits freak her out.
Thanks Tornado Dragon!