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Gru is a lonely and cynical supervillain who spends his daily life stealing, committing unimportant crimes and making others upset/scared. He lives with a large group of silly, unintelligent yellow creatures who serve him as minions and his assistant, Dr. Nefario who creates all of his evil gadgets for crime. One day, someone threatens Gru's career as a villain by stealing a pyramid from Egypt and putting the world into fear from a hypothetical loss of their landmarks. After much unsuccess at making a notorious name for himself, Gru decides its time to put his and his assistants evil plan into motion. To prove himself as a villain, Gru decides he must steal the moon using a shrink ray.

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Gru realizes that he doesn't have the funds to put his scheme of stealing the moon into action. In order to complete his plan, he must go to The Bank of Evil, a bank that helps fund villains, to take out a loan. However, the owner of the bank, Mr. Perkins doesn't trust Gru after his history of failure and losing their money, so he insists that Gru must first get the shrink ray before he receives the money from the loan. Mr. Perkins gives Gru a warning before he leaves saying that if he didn't start to earn the bank money, they would replace him with a younger, more skilled villain, like one named Vector, who stole the pyramid.

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After Gru steals the shrink ray from a lab, Vector, the villain who stole the pyramid, steals it from Gru, taking it to his lair. Gru, however, cannot infiltrate the house to get it back. He decides to adopt three children after he sees Vector let them inside his house to deliver cookies. He has to go through the struggle of getting the girls to behave so they won't get in the way of his plan. Additionally, he must use cookie robots that the girls sold to Vector to infiltrate his lair, steal the shrink ray, and escape when the plan goes awry.

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The Bank of Evil decides not to fund Gru, even after he recovers the shrink ray. However, the minions, girls, and Dr. Nefario all give everything they have to help Gru finish his mission.

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Dr. Nefario decides Gru must miss the three girls' dance recital to steal the moon, but the minions put their ticket to the recital into Gru's spacesuit pocket, just in case. Gru takes off, reaches orbit around the moon, and shrinks it, finally achieving his mission.

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However, Gru, happy at robbing the moon, speeds back down to Earth, hoping to make it to the girls dance recital. He had grown to love them and enjoy his life better with them in it. Even though Dr. Nefario sent them back to the orphanage because he viewed them as a distraction, Gru didn't want to give up his life of being their father just to return back to being a lonely villain.

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When Gru returns, the recital has ended, but the girls have been kidnapped by Vector. Gru runs to Vector's lair to save the girls from his clutches, but even though he defeats Vector's security system, Vector escapes in an emergency ship.

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Dr. Nefario realizes that the larger an object is, the faster the shrink ray wears off. He and the minions board their ship and chase after Vector, saving Gru. They then save Agnes and Edith from Vector's clutches. However, Margo hesitates to go onto the ship because she has trouble trusting Gru after he put her back up for adoption. Because of this, Vector gets ahold of Margo before she can escape from the ship. But, Gru and the minions risk their lives to save her, and Gru promises he will never let her go again.

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After the moon is returned to its normal size, Vector is stuck on it and all is settled. Gru starts to live a joyful life with a happy outlook on the world, developing a healthy relationship with the girls, apologizing for his mistakes, and recognizing the current love between them. He even makes up with his mom, who treated him unkindly in the past. The girls have a makeup recital for the one that Gru, the minions, and Dr. Nefario missed, and everyone dances together, knowing that they are now one big, joyous family.