Aleena, a teenage peasant girl, is lured into the mysterious and scary Gleaming Forest of Lost Souls where Good is at war with Evil. Queen Goodwende, ruler of the Good Spirits and the creatures of the countryside, are constantly battling against Archlord Pheande, master of the Evil Spirits.
His army, led by the Knights of Mayhem, is seeking to gain control of the local mortals and eventually those in the world beyond. Queen Goodwende, in order to save Aleena from his clutches, endows her with a power which changes her into a firefly whenever she is in danger.
Unfortunately Tayne, an evil lantern maker who uses fireflies to power his lanterns, catches her and decides to use her extra brightness to power a special golden lantern that he intends to sell to his king.
When Tayne’s cart is damaged, he visits the nearest smithy and meets the blacksmith and his two teenage sons. While he is there, he shows them the lantern and, although not realising that a girl is really the source of its light, the younger son, Kenelm, immediately falls under the spell of the lantern’s beauty. He begs his father to buy it for his birthday but Tayne refuses to sell it.
Later that night, a spellbound Kenelm leaves home to follow Tayne and plead with him to part with the lantern. When they meet, Tayne dupes Kenelm into going to the Land of Farbeyond, to work as his apprentice, by promising to give him the lantern when his apprenticeship is completed.