NOTE: This spoiler was sent in by brentage2000
The movie starts out with a band of villagers going out to Shrek's house, which is the hollowed out remains of a tree. When they get there, they begin talking about what ogres can do to you. While they're talking, Shrek (Mike Myers) sneaks up behind them, scares them witless, and tells them to stay off his property. As they're running away, one of them drops a notice saying that Lord Farquadd (John Lithgow) is handing out a reward on any and all fairy tale characters. Shrek picks it up, reads it, and then lets it drop back to the ground.
The next day, we see a huge line of people all gathered to get some money for the fairy tale characters they're bringing in. Next in line is an old woman with a talking donkey, and behind her, someone who has managed to capture Tinkerbell. The old woman (who may or may not live in a shoe) tries to get money for the donkey (Eddie Murphy), but the knights who are giving out the reward money say that if the donkey won't talk, they won't pay.
Meanwhile, Tinkerbell manages to break loose, but she accidentally spills some fairy dust on Donkey who flies up and away from his captors - for about five seconds. He then comes crashing back to Earth, where he runs away from the knights and manages to bump into Shrek. He follows Shrek home, despite Shreks insistance that he go away.
That night, Shrek is about to eat dinner when three blind mice interrupt Shrek's dinner. Looking outside, Shrek sees every fairy tale character. Shrek then vows to tell Farquadd to give him his land back.
Farquadd, meanwhile, is busy trying to get a rather stubborn gingerbread man to tell him who is hiding all the fairy tale characters, but he is interrupted by the arrival of the magic mirror, which tells him that his kingdom will only be perfect if he can marry a princess. After a dating game-type choice between Cinderella, Snow White, and Fiona, Farquadd picks Fiona (Cameron Diaz) to be his bride to be.
Shrek, meanwhile has made his way to a tournament between the knights, and after whooping their asses in true WWF Smackdown style, Farquadd tells Shrek that he now has the honor of rescuing Fiona from a castle that lays smack-dab in the middle of a live volcano. Needless to say, Shrek brings Donkey along for the ride.
When Shrek and Donkey finally get to the castle, they split up with Donkey going to find the princess and Shrek looking for the dragon. However, it works out the other way, and after a very intense chase scene, Shrek ends up unconscious in Fiona's bedroom and Donkey ends up romancing the very female dragon.
When Shrek wakes up, Fiona pretends to be asleep, and he shakes her awake, which pretty much shatters her image of the rescue she was hoping for (handsome knight, slain dragon, intense kiss). He then grabs Donkey from the lovestruck dragon and the trio barely escape from the castle. After rolling down an ash covered hill, Fiona discovers the secret of her rescuer - namely, that he's an ogre. The group then starts marching back towards Farquadd's castle, but along the way are attacked by Robin Hood and his merry men, who sing an extremely groan-inducing song before getting beat up Matrix-style by Fiona.
Now, here's something interesting. All through the trip, Fiona has requested that they stop before sunset, and she does not once emerge from whatever hiding place she sets up, until the sun has risen. Although she did secretly open the door at one point to hear Shrek telling Donkey that the reason for his isolation was that everyone judged him before they knew him, simply because he was a big, green, ugly ogre.
The last night before, they get to Farquadd's castle, Shrek confesses to Donkey that he might be in love with Fiona. He then leaves to get more firewood, even though, there's a huge pile not ten feet away.
While Shrek's gone, Donkey goes inside a cabin that Fiona has been in all night, but he can't find her. Suddenly there's a crash behind him, and out of the smoke comes an ogre in Fiona's gown. Seems Fiona had a curse put on her when she was a kid that would keep her a human by day and an ogre by night, and she will only be allowed to stay in her true form when she receives true love's first kiss. She begins moaning about how no one could love something as hideous and ugly as her. Shrek meanwhile, has come back from picking a sunflower for her, but he hears her say, "No one could love anything so ugly." He thinks that she's talking about him, and throws the flower down and heads off for the castle.
The next morning, Fiona decides to tell Shrek her secret, but when she gets outside, she finds Shrek, Farquadd, and a dozen or so knights waiting for her. Seems that when he went to the castle last night, he told Farquadd where Fiona was and got the deed to his land back.
Farquadd proposes to Fiona, who, after being insulted by Shrek about what she said last night (remember, he still thinks she was talking about him) gladly accepts the proposal. Shrek and Donkey get in an arguement after she leaves, and they split up. Shrek goes back home, and Donkey finds his way to a stream, where he meets up with his dragon girlfriend.
Back in the castle, Farquadd has been busy making plans for the wedding. He gets outfitted in a nice white furry wedding gown, and Fiona is fitted and given a wedding dress. Shrek, meanwhile, has become even more miserable than he was before, just moping around and picking at his food. Eventually, Donkey shows up, and he convinces Shrek to go tell Fiona that he loves her by saying that when she said "hideous and ugly," she was talking about someone else.
The pair then board the dragon and hot-wing it to Farquadd's castle. They get there just as Farquadd and Fiona are about to kiss. Farquadd tries to get rid of him, but before he can, the sun goes down, and Fiona turns into an ogre. A bunch of palace guards show up to kill Fiona and Shrek, but before they can do this, the dragon breaks through a skylight and eats Farquadd up, spitting out his crown.
Shrek and Fiona then kiss, and after a dazzling light show, Fiona finds that she is still an ogre. Seems that Shrek is her true love. They go back to his place and get married in front of all the fairy tale characters while Smash Mouth (guest starring as a dwarf band) plays a rendition of "I'm A Believer." ("I thought love was only true in fairy tales...")
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