Tak, hero from the previous game has been randomly falling into deep sleeps. During this time, he travels to a Dream World, where he is told that he must rescue a princess, or else he will fall into a sleep from which he will never awaken from. Tak and Jibolba, Taks mentor, travel to visit Jibolbas brother, JB, who is an expert in dreams.

Tak 2 is fairly different from Tak and the Power of Juju. While it is still a 3D platform game, it is more focused on puzzles and combat as opposed to collecting items. In earlier stages, Tak must use animals to his advantage as he makes his way through levels - for example, a bear can be used as a trampoline, Tak can ride warthogs after being sprayed by skunks to mask his scent, and more. Jibolba is along for the ride, but has transformed into a flea for easy transport. As a result, you can throw him at enemies to bite them and make them sleepy.

Later on, Tak gains the power to transform into various animals himself. As a frog he can swim without being eaten by crocodiles, he can soar on air currents as a flying squirrel, and can break through barriers by charging through as a warthog. When Tak gains the titular Staff of Dreams as he progresses through the game, he can also create more powerful attacks using his magic, or juju.

Features:
Unlock mini-games and compete head-to-head against a friend
Defeat your enemies by using power-ups such as feathers, bolas, and potions
Morph into various animals to gain their special abilities