Traditionally annuals are just extra stories, that don't have to be slotted into mainstream canon continuity.  One big adventure in one big issue.  But usually there are tell-tale signs of identifying when they take place... and I don't just mean looking at the year it was published.

For instance.  The New Mutants' first annual had to take place between issues 21 & 23.  It HAD to because Warlock & Cypher joined the team in 21 and they were in the Annual.  Then the next issue saw the start of the Cloak & Dagger/Sunspot & Wolfsbane story.  Cannonball started dating Lila Cheney in the annual which explained him wearing a Lila tour t-shirt in #23!  So, that's fair enough.  Easy to see where the annual fit in.

The Asgardian adventure cross-over with the Uncanny X-Men Annual slotted straight into continuity clearly at the end of #34 after Karma had defeated the Shadow King.  The issue tells you what to read next, and clearly Karma was hideously obese at the end of the issue, was clearly obese at the start of the Asgard adventure, skinny by the end of the Asgard adventure and skinny by the start of #35.

One last example of simple detective work.  New Mutants Annual #2 featured the first US comics appearance of Psylocke.  She made an appearance in #46, so clearly the annual had to be before that issue.  It could have been after #45, but that is such a depressing issue with the suicide of Larry Bodine, and the cover indicated that it was part of the Mutant Massacre month... so Psylocke had joined the X-Men but didn't venture down into the Morlock tunnels.  So it's reasonable to assume that New Mutants Annual #2 came before New Mutants issue #45.

The problem is Giant-Sized New Mutants Annual #3!  It's such a fun issue, but it doesn't fit in with regular New Mutants continuity! 

Just look at the New Mutants roster in the annual: Cannonball, Cypher, Magik, Magma, Mirage, Sunspot, Warlock & Wolfsbane.  Notice, that Karma isn't there.  So?  Well, Karma left at the end of #54.  You'd think that means Annual #3 took place after that issue, right? 

Wrong!  The annual clearly had Warlock & Sunspot in it.  They ran away from school and joined the Fallen Angels right after issue 52 finished.  The events directly linked in to the start of Fallen Angels #1.Then the annual took place when they returned... but the annual was published in 1987, and it was 1988 when they returned to the main New Mutants series.  And worst of all, Sunspot & Warlock returned to Xavier's School for the Gifted in issue #59; at the start of the Fall of the Mutants storyline.  By the time they caught up with the other New Mutants on the Ani-Mator's island, Cypher was about to die.  Poor Doug.

Which means... that a fun story like Giant-Sized Annual #3 couldn't have taken place after Sunspot & Warlock returned.  I could just add 12 issues to the break from the last annual, but that takes it to New Mutants #56, but that was during Sunspot & Warlock's tenure with the Fallen Angels. 

So all-in-all, I can't find a place to slot Giant-Sized New Mutants Annual #3 into regular New Mutants continuity...

Yeah, I know.  I have no life.