He was sent in the Wasteland to battle the animatronic Captain Hook, but after the Blot's attack, Captain Hook went mad and stole the Sprite (the Wasteland's version of Tinker Bell) leaving Pete Pan unable to fly and trapped on Skull Island (Skull Rock). When Mickey rescues the Sprite, it flies to Skull Island and Pete Pan comes to the Jolly Roger to fight Hook, if you didn't defeat him already, that is. This keeps Hook busy to his original antics. If you talk to Pete in Mean Street, he will give you a Power Spark.