Atlantis: Milo's Return is a sequel to Atlantis: The Lost Empire that was released in 2003. It is an edited version of three episodes of the cancelled Team Atlantis series linked together with new animation to form a sequel.
After the decline in Atlantean culture following the sinking, Kida (Kidagakash), now Queen, and married to Milo Thatch (now a king), is using the heart of Atlantis to restore her city's former glory. Suddenly, Milo's comrades and Mr. Whitmore arrive in Atlantis; while their arrival is unexpected the Atlanteans welcome their old friends. Unfortunately, they have come to inform them of mysterious forces causing trouble on the surface. At first they presume it to be an ancient Atlantean defense mechanism gone rogue (like the Leviathan from the previous film, although it remained loyal). But when they arrive at Norway, they discover it is actually a creature known as the Krakken, which had been attacking ships and taking their cargo to a cliffside village, which is devoid of spirits. They later discover that the town leader, Edgar Vulgud, seems to be controlling the Krakken, but soon learn that the Kraken itself is the master, having made a deal with Vulgud. When they blow up the Krakken, Vulgud disintegrates, restoring the spirit of the village. Milo says it's up to people like Inger to raise their little ones in peace. (A deleted scene shows that Inger's child has Kraken tentacles, implying it's not over.)
All the while, Kida is learning about the outside world and is adapting well. However, she still feels guilty, as there could still be other Atlantean war machines in the world causing problems, like the Leviathan. Their next mystery is in Southwest, involving coyote spirits opposing them. They later find a hidden city in Arizona contains a statue that greatly resembles Atlantean architecture. Unfortunately, a very sly shop owner, Ashtin Carnaby, intends to pillage the place for its valuables, but the spirits then turn him into one of them. Chakashi, a Native-American man, who was a median between the spirits, trusts them with the knowledge of their sanctuary and informs Kida that she can choose Atlantis' destiny.
The third mystery that needed to be solved was from Whitmore's cabinet. An old competitor Erik Hellstrom stole a possession of his (having lost his mind following the stock market crash ruining his company; Hellstrom thinks he's Odin), an artifact called the Spear of Destiny (aka Odin's spear, Gungnir), presumably an Atlantean artifact of origin. When they track him down in the frigid Nordic Mountains, he presumes Kida to be his long lost daughter and kidnaps her. His intentions are to end the world in Ragnarok. He creates a lava (the Fire demon Surtr (or Surtur)) and ice beast (a Nordic Frost Giant) to destroy the world, but well-placed explosives used by Vinnie annihilate the monsters (By causing each beast to believe they were trying to destroy each other). During these escapades, Kida comes into a greater understanding of just how powerful the Atlantean Crystal is, and she must choose between hiding it and sharing it with the rest of mankind.
Having retrieved the spear, Kida realizes her father was wrong to hide the Crystal from mankind. She combines the Spear with the Heart Crystal and lifts Atlantis to the surface. Two fishermen are shocked when they suddenly see an entire continent rise before them. In the end, we see Atlantis above the water for the first time in over 9000 years.
As the movie comes to an end, Mr. Whitmore narrates that from then on, the world was a better place.