In a small village in France, many years ago, a magical toy maker keeps a shop . Throughout the shop are dolls and toys of all shapes and sizes made by Monsieur Grendall and his assistant, but they have other dolls that are kept tucked away. Those are special dolls that, with a special key, can be wound up to dance. One in particular — his Ballerina Doll – he has been working very hard to complete with no success. Frustrated, he puts the doll back behind the curtain to work on another time.
Outside, village children walk by his shop windows and dream of the delights inside as they see him working. A schoolmistress, Mademoiselle Moiré, is bringing a group of children to meet the toy maker and pick out a gift. When they arrive, Monsieur Grendall and his assistant welcome them into their boutique. The children are very excited to be in the mysterious shop and run around to explore. Annette, one of the children, is very curious about what is hidden behind the curtains. Sneaking off, she discovers the unfinished Ballerina Doll and immediately dreams to have her. Monsieur Grendall catches Annette and brings the girls together to show what is in his big toy chest. Of course, this only works temporarily and all the children begin to look behind the mysterious curtains until Monsieur Grendall has them sit so he can show some of his special dolls.
When the dancing dolls finish, the children tire and begin to make their way home, taking their doll from Monsieur Grendall’s big toy chest. Annette hides behind one of the curtains, waiting for the men to leave so that she may see the unfinished ballerina doll once again. When the exhausted doll maker and his assistant fall asleep in the shop, Annette carefully emerges from behind the curtain and discovers the Ballerina doll right there before her! She tries many ways to get the doll to work before she remembers seeing a special crown in a box on the desk. Annette puts the crown on the ballerina doll’s head and magically, it begins to move. Annette then spends a wonderful night dancing with the Ballerina Doll. In the morning, Monsieur Grendall and his assistant wake up to find Annette with the Ballerina Doll. They become frantic with surprise when the doll starts moving. Annette tells them she wants to take her home but the assistant insists that Annette have one of the smaller dolls from the toy chest. Annette will not hear of it and proceeds to let all the dolls out of their hidden places where they dance along with the ballerina doll throughout the workshop.