The apprentice's friends think hearing the latest story by Fritz, the writer, will cheer poor Karl up. At least it will distract Karl from the fact that he hasn't produced a new moving figure for the great timepiece at the center of town, as he was supposed to. But to Fritz's horror the story he tells Karl begins to come true, and one of the main characters -- the evil Dr. Kalmenius -- shows up with a terrifying piece of clockwork. It's a knight called Sir Ironsoul. And when Karl decides to accept Dr. Kalmenius's offer and try to pass Sir Ironsoul off as his own work, the results are...well, deadly.