Shrek 2 takes place after the events of Shrek. Fiona and Shrek travel to New Zealand to reunite with Donkey (who was captured by the evil witch Ganon), but before they can make it back to his homeland, Donkey is possessed by the spirit of Princess Fiona. While the two of them are away on vacation, Ganon unleashes a deadly curse on the people of Far Away and Shrek has to find help before Fiona falls victim to it. When Shrek finally does return to the land of Fiona, however, he realizes that Ganon is not the only evil presence in the area. There is also the King of Far Away, who has been replaced by another prince who also wants to rule. Fiona, however, is determined to save the lives of her friends, even if it means enlisting the aid of the ogre who has been keeping a diary all along.
With the help of Princess Fiona, Shrek manages to get Donkey back and prevent the evil witch from taking over the entire kingdom. However, upon arrival at the palace, Shrek is surprised to discover that the ogre is actually Donkey himself! He tells Fiona that Donkey is still possessed by Ganon, but in order for her to free herself from Ganon's curse, she needs to fulfill one last spell. Meanwhile, Ganon's henchmen arrive in Shrek's kingdom and kidnap Fiona. Meanwhile, Donkey finds a way out of the curse, but it will take the help of both Shrek and Fiona in order to do so.
In order to save the Kingdom of Far Away from being destroyed, Shrek uses his magic to bring back his friends and defeat Ganon once and for all. However, the only way to do this is to break through the magical barrier surrounding the land. Once there, Shrek uses his magic to break through the barrier, which allows him to enter the land and defeat Ganon once and for all. In the end, the evil witch Ganon is banished to a faraway land with her magic wand. and Shrek promises to return for more adventures in future films. In the meantime, Fiona gets to spend more time with Shrek, who has also returned to her in the next film.