One year after the events of the previous film, Hiccup, Toothless and their fellow dragon-riders continue to rescue captured dragons in order to bring them to Berk and its bustling dragon and human utopia. Their efforts have resulted in the island becoming overpopulated with dragons. In a response to the overcrowding, Hiccup aspires to find the "Hidden World", a safe haven for dragons spoken of by his late father Stoick. Meanwhile, a white female Fury, held captive by warlords, is given to infamous dragon hunter Grimmel the Grisly as bait for him to capture Toothless for the warlords' use as an alpha.

Toothless discovers the white female Fury[10], whom Astrid calls a "Light Fury", in the woods and the two become enchanted with each other until the Light Fury, sensing Hiccup's nearby presence, becomes frightened and flees. Hiccup and Tuffnut later discover Grimmel's dragon traps in the area which were intended to trap Toothless. Grimmel visits Hiccup that night, revealing he has hunted down all the other Night Furies, but Hiccup has prepared an ambush to capture him. Grimmel escapes, burning down Hiccup's house and part of Berk in the process. In response, Hiccup rallies the citizens and dragons to leave Berk on a quest to find the Hidden World and safety from dragon hunters.

Mid-journey, the Berkians discover an island on which they initially plan to rest for a short while. Seeing Toothless's inability to fly solo hindering his growing relationship with the Light Fury, Hiccup builds an automatic tail for him.[nb 1] Upon receiving the tail, Toothless flies off, meeting the Light Fury on his own and flying with her to an unknown land. Valka, on a scouting patrol, notices Grimmel's approaching army and quickly reports back to Hiccup. Hiccup and the riders head to capture Grimmel; yet, they fall into his trap and barely escape. Ruffnut is captured but irritates Grimmel into letting her go, after he realizes he can secretly follow her to the Berkians' new location...