The book "Dr. DeSoto" is a sweet kids' book that I have read to my own kids. While not among the greats in children's literature, it's a good story and was translated well to the screen--with decent animation, music and pacing. The only thing is that while it is very good, it never seemed magical or unique enough to merit its being nominated for the Best Animated Short Film Oscar. Perhaps it was just a slow year--especially since animation was in a bit of a slump at the time and wouldn't begin to pick up for another few years (with the re-introduction of good Disney animated films and better TV fare for kids in the late 80s and into the 90s).
If you are a kid, it's worth a look. If you are an adult, then watch it with your child--otherwise, this one is skip-able. Instead, try watching the winner that year--CHARADE. It's a very funny film though the ending isn't the most family-friendly I've ever seen!