Don't read this if you haven't seen the movie. This is SPOILERIFIC. Go see the movie now. It is awesome. Then come back and read this.
Pixar's latest film is an astoundingly good meditation on death and the afterlife... with toys. Through the course of the movie the protagonists confront or consider a variety of possible scenarios for what fate awaits them. Most interestingly the movie has a clear hierarchy for which possibilities are the best and worst.
At the beginning of the movie we know already that Andy, the owner of Buzz and Woody and friends is going to college. The toys make a last ditch attempt to get him to play with them, but when it fails they resign themselves to the fact that their life as Andy's toys is over. This is death. The movie takes it for granted from the get go. There is no question whether the toys will "die". The question is what awaits them afterward. We are presented with 5 options in order from the worst to the best:
#5 - Annihilation. The worst possible fate awaiting the toys after the end of their life with Andy is total annihilation according to Pixar. At the genuinely terrifying climax of the movie the toys are in the furnace at the landfill unable to escape and on the absolute brink of being melted down. The scene is presented in such a bleak way that I was actually convinced Disney would allow children to watch their favorite animated toys get obliterated against all meta-film logic. Amazing storytelling and a sublime example of eucatastrophe let you know that this is not the option the writers choose for their characters. Beyond the furnace there is nothing. They could have chosen to show melted plastic being recycled and include reincarnation among their possible afterlifes but in the film the fire is just a full stop. It is fascinating that this was the worst fate in the writer's minds because it is one that a growing number of atheists are perfectly comfortable with.
#4 - Hell. Not as extreme as annihilation, but almost as bad is Hell, which in this case takes the shape of a daycare/gulag run by an evil pink teddy bear. The toys are imprisoned and tortured by having their joys turned into nightmares and their identities robbed (in the case of Buzz Lightyear). Interestingly, hell itself offers a choice of destinations. The destiny of most toys in hell is to become trash and be annihilated. The only way to avoid ending up at number 5 is to become the jailers and imprison and torture other toys. Staying in hell means becoming Satan.
#3 - Purgatory. Initially the toys were going to be put in a box in the attic awaiting an unknown future. There is some hope, "Andy might have kids of his own one day," but no certainty - they could still end up getting sent to hell (donated) or annihilated (thrown away). Purgatory is not as good as life, even Woody who gets to go to the nice purgatory (college) has to leave his friends, and none of them get to do what they feel is their purpose: be played with by Andy. After facing Hell and Annihilation the toys decide that purgatory looks like an acceptable fate, because they can't imagine better... yet.
#2 - Heaven. The evil pink teddy bear steps over the line and is tossed out of Hell by his own lackeys. What happens then is pretty profound - Sunnyside Daycare become the Toy Story version of Heaven. This is a place toys go when they die, but instead of a gulag where they are tortured, it is a place where they are cared for and made whole. According to Pixar heaven and hell are the same place and even all the people are the same. The only difference? How they treat each other. As good as heaven is though, this is not the fate that the writer's chose for their characters. Woody envisions something even better...
#1 Resurrection. The toys end up handed down, by Andy to a young girl who he trusts to take good care of them. Andy hands each of them over, relinquishing ownership by telling their story one by one to the girl who takes them with gratitude. The difference between this and heaven is that it is not an escape from the world. The toys remain in the world for which they were created, to be owned and loved by a kid. Escape from this world isn't desirable, even to go to a nice-seeming place like heaven, because this is the world God created and loved. The toys wave goodbye to Andy who is moving on to a new life of his own while Woody, Buzz, and the gang look astounded at having been given a fresh beginning. The best of all possibilities for life after death, according to Pixar, is to rise again; to be gifted a first day, after our last.