Lily the llama has been chosen to lead the annual County Parade. This means she gets to wear the special red saddle pad that is saved for special events. When she is teased by her cousin Pepper she decides to try on the pad ahead of time to see if it fits, but a wind comes up and blows the blanket off her back. Lily and her close friend Frank the cat set off to find the saddle pad and get it back to the ranch before the parade.

They meet many new friends along the way but much to their dismay they also discover the blanket has been torn to pieces by its travels. Lily is devastated but Frank decides to have all their new friends help him sew a new saddle pad out of gifts they received of grasses and flowers. When Lily wakes up the next day she finds the wonderful present from her friends and she puts it and Frank on her back and they head home to the ranch. By the time they get home they discover that the magic of friendship has turned the homemade saddle blanket into a beautiful quilt made of silks and velvet and embellished with jewels. Lily wears the blanket proudly in the parade and all her new friends join in the fun.