The Adventures of Elmo in Grouchland (1999)

Elmo loves his fuzzy, blue blanket, and would never let anything happen to it. However, a tug-of-war with his friend Zoe sends his blanket to a faraway land, and Elmo in hot pursuit. Facing life without his cherished blanket, Elmo musters all of his determination and courage and heads off on an action-packed rescue mission that plunges him into Grouchland, a place full of grouchy creatures, stinky garbage and the villainous Huxley. Along the way, Elmo learns an important lesson about sharing, realizing that he was selfish with his friend and responsible for what happened.