Carbon dots (CDs) or carbon quantum dots (CQDs) have emerged as rising stars in the carbon family due to their diverse applications in various fields. CDs are spherical particles with a well-distributed size of less than 10 nm. Functional CDs are promising nanomaterials with low toxicity, low cost, and enormous applications in the field of bioimaging, optoelectronics, photocatalysis, and sensing. Plastic is non-biodegradable and hazardous to the environment, however extremely durable and used in abundance. During the COVID-19 pandemic, the use of plastic waste, particularly masks, goggles, face shields, and shoe cover, has increased tremendously. It needs to be recycled in a productive way as plastic wastes take hundreds or thousands of years to degrade naturally. The conversion of plastic waste into magnificent CDs has been reported as one of the key alternatives for environmental sustainability and socio-economic benefits. In this review, synthetic routes for the conversion of plastic wastes into CDs utilizing hydrothermal, solvothermal, pyrolysis, flash joule heating, and characterization of these CDs using different techniques, such as Fourier-transform infrared spectroscopy, Raman spectroscopy, X-ray diffraction, and transmission electron microscope, have been discussed. Furthermore, potential applications of these plastic-derived CDs in sensing, catalysis, agronomics, and LED lights are summarized herein.