Peggy (Molly Shannon) is a single woman living in LA with her dog Pencil, named so because "when he was young, he was thin, long, and brown." She is just infatuated with the dog and spends all her free time with Pencil, evening cuddling in bed at night.
One night, at 3 am, Pencil has to go to the bathroom. Peggy wakes up, lets Pencil out into the yard, leaves the door open and goes back to bed. A few minutes later, she wakes up to see that Pencil has not yet returned to her bed. She gets up and sees the dog at the edge of her yard. When she calls for Pencil to return, the dog wanders off into her neighbor Al's (John C. Reily) yard. She's tired and rather than chase the dog, returns to bed.
Next morning, Pencil hasn't returned and she goes next door to find out the dog is on his side breathing heavy, outside Al's garage door. She rushes to the vet, to find out Pencil was poisoned. Working at the vet's office is Newt (Peter Sarsgaard) who takes note of Peggy's love for dogs.
Later that night, Al comes over and after finding out what happened to Pencil, he offers to take Peggy out for dinner. Over dinner, Al explains he used to have a dog, but he killed it accidentally while hunting, thus only keeping knives in his house, and no guns. After returning to Al's home after dinner, Peggy searches the garage to see if she could have found what poisoned Pencil but she finds nothing. At the end of the night, Al reveals that he likes Peggy, but Peggy doesn't feel the same way.
Peggy is obviously distraught about the dog when Newt calls and informs Molly of Valentine, a german shepard who was abused, and will be euthanized unless he is put into a good home. Molly takes the dog in and begins to possibly pursue a relationship with Newt's character.
Because of Newt, Peggy has now become a vegan and works part time with Newt trying to find sheltered dogs, good homes. Newt also has 3 dogs (including Buttons, a severly injured dog), which is the legal limit, and thus needs to find a home for Valentine. Newt offers to train Valentine to help him overcome his past of abuse.
At work, Peggy forges her bosses signature as revenge, on checks made out as donations to various animal charities that Peggy has found via the web when the boss refuses to sign a petition that would help end lab testing on ducks.
She eventually finds out that Newt doesn't want to pursue a relationship because he is in a relationship with "a woman...or a man." They still remain friends. Peggy even continues to have Newt train Valentine on weekends.
Peggy then is asked to babysit her brother's kids while her brother and his wife go away for a night together. While babysitting, Peggy shows the daughter the animal farm where Peggy had adopted a chicken in the name of the daughter. The child becomes an animal lover too.