In a village near a magical forest a time long ago, there lived a young boy, Marcello, who worked as a baker’s apprentice. Marcello was a kind boy, but rather than work, was often out hunting for fireflies in the forest. On one such hunt, Marcello ventures deeper into the forest than usual and comes upon a group of fireflies playing with a beautiful crystal. Unbeknownst to the young boy, the crystal’s owner, a dragon, sleeps nearby in his lair.
Marcello catches the fire fly with the crystal, who fearfully gives him the crystal in exchange for her freedom. When the dragon awakes, he chases Marcello in an attempt to get back his crystal. Unsuccessful, the dragon instead chases Marcello out of the forest and angrily withdraws into his lair.Marcello returns to his village, frantic to share his plight and tell of the dragon. In an effort to prove his story to his friend Jacques, he produces a shimmering crystal. When Jacques realizes that Celeste finds the crystal enticing, he tries to wrestles it away from Marcello. The baker sees the two boys wrestling, and pulls his apprentice back into the shop to stop the tug-of-war over the crystal. Jacques, who now has the crystal as his own, shows it off to Celeste. She wants to keep the crystal, but Jacques says he will give it to her at the cost of a kiss.
With the baker distracted, Marcello rushes out of the shop and steals his crystal back. But the baker calls him back to watch the shop again while he helps a lady carry away a large cake. While the baker is away, Celeste and her friends scheme to get the crystal away from Marcello, without paying the “price” of a kiss.Finally, Marcello offers to lead the group of youngsters in a journey to the forest where he originally found the crystal, if they feel they are brave enough. To encourage the girls to go, Celeste is trusted with carrying the crystal, and she drops it into her pouch. They agree to meet at the edge of the forest. After the boys close up the baker’s shop they leave for the forest. When they get to the forest, Marcello is again distracted by the fireflies and they are caught in a net by the gnomes, who think Marcello still has the crystal. Anxious to get the crystal back to the dragon, the gnomes take the two boys to the dragon’s cave. The boy leaves behind the firefly net, which is discovered by the girls. Scared but determined, the girls enter the forest to search for the Marcello and Jacques.
At the dragon’s cave, the girls are met with fury by an angry dragon, who won’t let the two boys go free from the net that keeps them captive. The girls run away in fear and collapse. Just then, the Snow Spirit arrives in the forest, and it begins to snow. The girls offer the Snow Spirit the crystal in exchange for helping them rescue the two boys from the dragon’s lair. The Snow Spirit refuses the gift, and explains the crystal is only lucky for the dragon. Instead, she gives Celeste a lucky necklace. When Celeste puts the necklace on, her friends freeze in place. When she takes the necklace off, they come back to life.
Returning to the dragon’s lair, Celeste puts the necklace around her neck. The dragon and all others freeze in place. Bravely, she removes the net from the two boys and puts the crystal next to the sleeping dragon. She removes her necklace to bring all back to life. As the awakened dragon begins to chase them, he finds the crystal and pauses and the kids run away towards the village. The dragon, seeing his crystal returned, dances with joy.
The entire village celebrates the return of the kids. Acrobats, dancers and musicians fill the village square as Celeste tries to coax the boy into the kiss he wanted in exchange for the dragon’s crystal. Even without the crystal, Celeste still has the magic necklace which is very helpful when she sneaks a treat from the baker’s shop.