A boy named Arnold discovers a magical collection of miniature, animated wooden puppets created by a puppetoon master, resulting in an enchanting journey through different animated tales. These puppetoons come alive to showcase a series of short, fantastical stories, each featuring unique characters and imaginative settings. Arnold is fascinated by the intricacies and whimsy of the animated shorts, which range from humorous adventures to heartwarming fables. As he watches, he becomes gradually more immersed in the spellbinding world of stop-motion animation and storytelling.

Throughout the film, Arnold encounters various lively puppetoons and is guided by the voices within the collection, learning valuable life lessons along the way. Each animated tale he witnesses presents new themes and delights, underscoring the magic and creativity inherent in the art of stop-motion puppetry. Though captivated by these wonderful stories, Arnold faces an inevitable challenge that links his real world to the animated universe he so admires. The film celebrates the pioneering era of animation while highlighting the timeless appeal of imaginative storytelling, using the puppetoons as a bridge between wonder and wisdom.