Plot hole: This TV movie uses a lot of flashbacks to the previous 4 installments, by having people saying to each other, "Hey, remember that time when we..." a bit more than usual. In the village of the Minotaur, Iolaus remembers the fight from Hercules and the Amazon Women where he dies. That is also the reason why this flashback is interrupted just before that point. But at the end of the Amazon Women story Hercules used magic to jump back in time and change history so that the whole adventure had never happened (next making sure that it would not happen all over again). Obviously they wanted to use some cool action footage from all the TV films. But Iolaus could not remember these events as it happened in some cancelled version of the future. (Hercules remembers, but he wasn't going to tell anyone, and that's what we have to go on).
Plot hole: Eric and Shelly were killed because they were trying to fight tenant eviction. Yet, a year later the building is seemingly abandoned. Eric and Shelly's stuff is even still there. So what were they killed for if nothing was ever done with the building?
Plot hole: Towards the end of "The NeverEnding Story 2", Bastian's dad became aware of his son's adventures in Fantasia. Yet, in this film, he reacts to the news about Bastian stealing the NeverEnding Story as if he's never heard of the book before. Adding to that, he does not recognize the Auryn on his son's sweater nor does he know what it can do.