In this adaptation of the Grimms' story, children are discovered playing "Ladder words', changing one world to another, a letter at a time, retaining an actual word during each change. Grettle says she can change "flax' into "gold'. Unfortunately, the King, whose gold has been mysteriously disappearing, hears this and mistakes it for an actual boast. He orders Grettle to work the change, or she will lose her head, despite the Prince's protests who's in love with her. She's shut in the Tower to perform her task, and Rumpelstiltzkin, the gnome, offers to help her-- at a price. The play then follows the gnome's defeat by the guessing of his secret name and, despite other complications from the wicked Baron and his henchmen, all ends happily.