It is a story of three veterans released from the army. During one night spent camping in the country they one by one wake up and meet three elvish brothers. Each of the veterans is given a magic item - one gets magic harp that provides him with servants by wish, other one endless pouch of gold and the last one owns magic hat that can create all the staff excluding money and people.
Dorota, a bad woman married the miller, out of sheer greed drives him to death. She then took the mill away from his son Peter and threw him out of the hime. Lucifer, who is known to rule in hell, sends out the devil Janek. He is supposed to fetch Dorota because the measure of her earthly sins is overflowing. But the devil himself can not handle this evil woman and flees to the military. There he meets Peter. By joining forces, they finally succeed in transporting the wicked Dorota to hell. Since then hell is hell. But for Peter, who is suddenly in possession of a magic mantle, begins a nice time, because strangely, the prince shows great interest in him.
Peasant children Mytyl and Tyltyl are led on a magical quest for the fabulous Blue Bird of Happiness by the fairy Berylune. On their journey, they're accompanied by the anthropomorphized presences of a Dog, a Cat, Light, Fire, and Bread, among other entities.
Follows Ralphie, now adult, who returns to the house on Cleveland Street to give his kids a magical Christmas like the one he had as a child, reconnecting with childhood friends, and reconciling the passing of his Old Man.