The Toy Taker's true identity - Mr. Cuddles.
The Toy Taker (real name, Mr. Cuddles), was a misguided, thieving, anthropomorphic teddy bear who served as the main villain of Rudolph the Red-Nosed Reindeer and the Island of Misfit Toys. After his much-loved owner, Steven, apparently threw him in the trash, Mr. Cuddles became rather bitter and ashamed. Wishing to save his fellow Christmas toys from the inevitable fate of being "outgrown", the darkness of closets and attics, and the cold indignity of the trash heap, he put on an olive green fedora, a green trench-coat, sky blue mittens, and wore brown stilts and used a magic flute (it is never mentioned how he got a hold of it) to hypnotize other toys into his clutches, and hid them in his secret hideout, located inside an iceberg.
After stealing the toys right out of Santa Claus' workshop, Rudolph, Hermey, Yukon Cornelius, Bumble, and Clarice set out to find and capture the Toy Taker. He succeeds in stealing toys from Castaway Cove, but after plundering the Island of Misfit Toys, the heroes disguise themselves as toys and sneak aboard the blimp he uses as transport. After the heroes are discovered, the Toy Taker sends them through a trapdoor. They fly back on board and seem to corner him, but he escapes to the top of the blimp, followed by Yukon. Yukon is thrown off the blimp by a passing Boomerang That Doesn't Come Back, only to be rescued by Bumble below (who couldn't come aboard the blimp because he was too large). Rudolph and Clarice then scare the Toy Taker with the light from Rudolph's nose, prompting the thief to parachute into Yukon's peppermint mine. After a chase through the roller-coaster like mine, the Toy Taker makes a run for it, but is lassoed by Yukon Cornelius with dental floss borrowed from Hermey. His identity is revealed to Santa and his captors, and he tells his story.
Mr. Cuddles reforms when he hears that his banishment to the garbage heap was an accident. Steven had placed him in the box on the shelf in his closet to save his beloved childhood friend as a family heirloom, and was now trying to find him. He is repaired, as his seams were coming undone at an increasing rate throughout the film, and given to the daughter of his former owner that same Christmas Eve night, after returning all the toys he kidnapped.