Damian, an average middle grader, discovers his elvish heritage when he meets Lady Rachel, his aunt, who happens to turn his bike into a stallion to summon him to her castle. At Lady Rachel's palace Midwood, Damian discovers a world of magic, from the wood's heart to the fay tree. He stumbles across marvellous things he never thought he would. But, everything is not as it should be. While Damian is on his way home, he notices that the wood is on fire, and Lady Rachel comes and puts it out with the dryads' help. While back at home, Damian's neighbour is holding a mermaid prisoner in his pond. Damian plans on helping the mermaid escape. But he has no idea how to do it. His grandmother, who happens to be an enchantress herself, comes visiting from whom Damian begins to learn simple magic tricks. Meanwhile, Damian rescues the mermaid with the help of Lady Rachel and his grandmother. Damian notices that his stepfather is acting odd, and he feels that he is up to something. When Damian's mother's diamond goes missing, Damian suspects his stepdad. One night, he awakens to the sound of his stepfather leaving the house and follows him to the museum, where he sees him stealing something. Damian sets off the alarms. He lets Lady Rachel know of what is going on, and they figure out that Damian's stepfather is an elf banished long ago from the elven kingdom. When Damian is finally summoned to the elven kingdom by his real dad, who happens to be the king of the elves, Damian is chosen as the dragon lord by a magical diadem. Together with his father, Damian sets off to the kingdom of the dwarfs, where the most powerful dragon dwells. Damian's stepfather gets there before them and summons the dragon with the help of the diamond he stole from Damian's mom. The dragon isn't fooled and speaks to Damian telepathically and, together with the help of the dragon, puts an end to his stepfather's scheme of destroying the elven kingdom. Damian and his dad go back to the elven kingdom. His dad gives up the throne to Lady Rachel and comes to live with Damian and Damian's mom.