In the village of Tromble lives woodland creatures who wield magic capable of banishing nightmares. Amongst them are the soft brown bear, Paddy WickWack, and his best friend, Bunny Sweet Dreams. Together, they create the magic that protects children from nightmares, helps create blissful dreams, and keeps the belief in magic alive.

One day Precious, a scouting butterfly from Tromble, encounters two very sleepy little girls named Jess and Lily. Upon her inquiry, she discovers that the girls have been kept awake all night by terrible nightmares. Concerned by this news, she wastes no time flying back to alert Paddy and their friends of the impending trouble.

Long ago, they encountered nightmares that tormented children by targeting them during their daily naps; so, they would be more tired in the evening, making it easier to fill every corner of their minds with bad dreams. And without rest, children stop believing in magic, and Tromble would cease to exist. But, Paddy and Bunny had banished them back then, and are prepared for them now.

Paddy wields a magic wand that produces powerful moonbeams, creating a force field that guards against nightmares while Bunny uses her enchanted basket to wisk fairy dream sprinkles over the room. The process is complete when the children recite the secret rhyme: “Here I lay, my eyes closed tight and fairy dreams I’ll dream tonight, I wish I may, I wish I might stay asleep all this night,” finally banishing the nightmares.

However, to the shock and despair of everyone in Tromble, Bunny’s basket is missing! Thankfully, the other animal residents agree to help them find it. Together they search high and low throughout their village, expanding into the Fairyville Forrest that surrounds Tromble. Even the fairies agree to help explore - including the fairy princess, Scarlett!

Paddy and Bunny become distracted and pulled off course from their task by a shadow secretly lurking behind them. This shadow is a nightmare