Hans the toymaker is about to be turned out of his workshop by the landlord, who wants to let the property to an Arms maker. A tired wanderer, complaining that he is unable to sleep and with no money turns up at the toymakers door and is offered shelter, food and a place to sleep for the night. As the Wanderer is left alone in the workshop, the Toymaker's life size dolls come to life and sing a magical lullaby, enabling the man to finally get some sleep. The next day sees visitors to the town proclaiming that the king has lost his memory from lack of sleep and has gone missing. The Wanderer awakens and fully restored is discovered to be the missing King. A firm friendship forms between the King and the Toymaker and his home is saved.