Using Russell's GPS system, they make it to Panama in no time with the help of a little tornado. Wanting to put the house down in the exact spot that Ellie drew in a picture, they decide to walk around a canyon dragging the entire building with them rather than just hopping back on the house to fly the short distance over. On the way they meet a rare Ostrich-type female bird they name Kevin (who gives one of the funniest moments of the film that you'll have seen in the trailer), and stumble upon a dog that can talk through a mechanical voicebox-decoder.
As it turns out, the dog belongs to disgraced explorer Charles Muntz (Carl's boyhood hero) - who happens to be a nobel-prize winning type genius when it comes to dogs ... and also a serial killer when it comes to fellow humans. (I know, right?! But in a friendly 'Incredibles' style way so kids aren't too scared.)
Muntz soon realises that his new guests have found the elusive bird -- the same one that has defeated him for 60 years -- in just a few minutes with the help of a bar of chocolate. Not too happy, Muntz wants the bird (to take her back to the US to clear his name) - and will kill his guests if they get in his way.
Carl and Russell defend the bird with their life as the balloons on the house keep popping.
Evil Muntz takes a torch to the house to make Carl choose between his memories ... or the bird. Carl chooses the house. He drags it to the right spot in the picture, while Muntz and the dogs set off for home in the blimp.
Slowly Carl comes to his senses, but not before the kid has decided to take some balloons and save Kevin himself. Carl dumps all his gear, then sails the house towards the blimp, rescues Kevin, and make it out before Charles takes it to the next level and brings out a shotgun!
Muntz follows the others into the house, resting perilously on the blimp's wing, but cannot get out as it falls -- and snatches a few balloons as he plummets to earth. Carl decides to steal the blimp and joyride it back home.
Meanwhile the house floats down to land in the spot they wanted all along - a prime spot of real estate. And probably on top of Muntz.
Back home, Russell is at his presentation evening, not having had time for a wash it seems. Carl shows up just in time and takes the badge to present to the young boy -- steals it -- and swaps it for an old Grape Soda bottle top that he tries to fob off. Don't believe me? Check it out!
The dogs are all in the audience, and bark together. They know what he's done.
We see in the credits that Carl now has his new portable home (the blimp) that he has graffitied with the tag "The Spirit of Adventure", Dug the dog has had many puppies, Carl makes some friends at the retirement home, the dogs are all looked after, and Carl and little Russell strike up a good friendship as they embark on many adventures together.