Luigi wants to know what happened to his brother before he finds Peach, so he looks for fragments of Mario's memories across the world to figure that out, but it turns out he would have needed to gather them anyways in order to enter the Alieson Castle, where the Puppet Master resides. He has taken Peach to create puppets of her, and Mario had to be eliminated, because he had seen a map to the castle. Luigi, after collecting the right memory shard, also sees a map. It tells him to take all the peices to Dream Land as he does so Kirby helps him. Soon Mario is alive and well.
List of allies
Every ally in Legacy of paper Mario has met Mario in the past(exept Kirby).
Shin the shyguy (not named when he first fought Mario)