In the centuries when man was only beginning to claim the earth as his domain, goblins, the creatures of the swamps and bogs and roots and caves, tried vainly to hold fast to the territories of their hideous ancestors. The legendary Goblin wars ignited the forests of Europe and Asia in the Goblins' last attempts at thwarting the newly established empire of Man.

In one small valley in the Northern Balkans, Kilban, the tribal king of a large band of humans, battles ferrociously against Marklund, the Goblin King, and his army of ogres. Year after year of bloody stalemate was finally broken when Marklund's beloved was slain in the forest beneath the human's makeshift fortress. Overcome with grief, Marklund pledges his revenge and retreats with his remaining forces to the safety of the caves beneath the valley floor.

But all is hardly peaceful. Several years after Marklund's retreat, a rival tribe of humans entered the valley to challenge Kilban's tentative hold on the small kingdom. Although Kilban himself died in the ensuing battle, his forces were victorious, leaving the kingdom to his wife, Emee, and to Griswold, his sixteen year old son. Yearning for the end of the fighting, and wishing to protect the life of her young warrior son, Emee makes a pact with the king of the marauding humans to marry Griswold to Larrabelle, the daughter of the tribal chieftain, LarFat. The wedding plans, including a two-year bethrothal, are set, to be celebrated on the day of Larrabelle's 18th birthday.

Marklund, hearing the plan, sends his ogres to the surface to kidnap Larrabelle, in hopes that her murder will satiate his hunger for revenge. While holding her captive, he discovers that Larrabelle has already grown fond of Griswold. Rather than kill her, Marklund places a curse on the young princess, that for the next two years she shall fall deeply in love with the boy, and upon the stroke of midnight on the eve of her wedding, she will jump from the highest cliff, before her lover's eyes. He releases her, and the two young lovers are passionately reunited in the dark night of the forest.

Nearly two years later, the Sorceress (and narrator of the tale) is visited by Emee for a blessing on the upcoming nuptials. The Sorceress confesses to seeing the curse placed upon Princess Larrabelle, who at that moment remembers what Marklund has done. She runs across the forest floor and high into the mountains beyond, to spare Griswold from seeing her die. Summoning Griswold to her den, the Sorceress tells the boy the final and most horrifying secret of her vision for him: that Marklund's lust for revenge against the boy has given the Goblin King the ability to transform himself into a dragon, and that the boy must fight the dragon to break the curse and save his love. Griswold goes into the forest,summons the Goblin King, who appears in giant reptilian form, and fights him to the death. Yet, as the clock in the distant tower tolls its final bell, Larrabelle jumps. The curse is broken, Griswold finds his lover on the valley floor. She awakens unhurt, and they return victorious to the castle for their wedding day.