Angered by her persistence, the Falcon demands that she return the ring to him immediately, but Margalo firms her resolve and attempts to flee. The Falcon attacks Snowbell for getting involved in the first place, but Margalo declares her independence from him and threatens to toss the ring off of the roof if the Falcon persists in hurting Snowbell. George tries not to break Stuart's promise, but when Frederick tells George that making a promise to Stuart is a good thing but his safety matters more, George reluctantly tells them that he is at the Pishkin Building, but when George asks if he's in trouble Frederick tells George he's in big trouble for lying. Eleanor asks George how George would feel and how they would all feel if Stuart got killed. Frederick tells George that it's never okay for George to lie to his parents. Meanwhile, the Littles are angry with George for lying and demand the truth from him. Regaining consciousness on a garbage barge and seemingly losing hope, Stuart sadly considers giving up until he finds his and George's broken yet still-functioning model airplane on the barge he cobbles it together with various pieces of junk and uses it to rescue Margalo and Snowbell. The Falcon traps Margalo in a paint can as punishment for betraying his trust and befriending Stuart, but Snowbell manages to reach the top of the building while the Falcon is absent and releases her. Infuriated by his blinkered claim, he attacks the Falcon by launching an arrow from a recurve bow at him, but this turns out to be futile as the arrow bounces off of his beak, and as a result, Stuart only succeeds in provoking the Falcon to the point of trying to kill Stuart by dropping him from the top of the building, only for Stuart to safely land in a passing garbage truck, though the impact knocks him out cold, even though the Falcon remains seemingly unaware of Stuart's survival. Stuart begs her to come home with him, but the Falcon flippantly declares that Margalo is not leaving his side if he has any say in the matter. Having overheard the Falcon's outburst, Margalo appears and reassures Stuart that the Falcon is actually telling the truth, although she really is his friend. Annoyed by Stuart's skepticism, the Falcon reveals to him his mother's ring. Despite revealing to Stuart that Margalo works for him, faked being injured, and stole his mother's ring, Stuart does not believe him. With the help of Snowbell's alley cat friend Monty, Stuart and Snowbell discover that the Falcon resides in the disused observation deck of the Pishkin Building. Before he leaves, Stuart asks George to lie about his whereabouts to his parents while he is gone. Upon realizing Margalo's disappearance, Stuart assumes she has been kidnapped by the Falcon and decides to rescue her with the Littles' cat Snowbell. A guilt-stricken Margalo saves him, then leaves the Littles' house the following night to protect Stuart. Stuart offers to be lowered down the drain on a string to get it, but the string breaks while he is down the drain. When the Littles discover that the ring is missing, they think it has fallen down their kitchen sink. Concerned for Stuart's safety, she reluctantly complies. The Falcon eventually loses patience and threatens to eat Stuart unless Margalo steals Eleanor's wedding ring. Unable to concentrate on her assignment for the Falcon, Margalo becomes close friends with Stuart. Orphaned as a fledging, Margalo assists the Falcon in exchange for a home, but Margalo grows reluctant to steal from the Littles. However, Margalo is secretly assisting a greedy peregrine falcon to steal valuables from households upon earning the homeowners' trust. Stuart takes her home and introduces her to the Little family, where he invites Margalo to stay with them for a while, to which she accepts. Later, an apparently injured finch named Margalo falls into Stuart's roadster on his way home from school. Stuart's adoptive father, Frederick, tries to encourage him, telling him that 'every cloud has a silver lining.' Stuart's relationship with George is strained further after he accidentally crashes a model airplane they were working on in the house. Three years after the first film, Stuart Little questions his abilities following a disastrous soccer match alongside his adoptive brother George, who accidentally kicked him with a soccer ball despite said kick scoring the winning goal for their team.

Audio tracks on stuart little disc 2