A king offers his daughter's hand in marriage to the wealthiest suitor in the kingdom. She is wooed by the despicable wizard Ali Kazam, but falls for a pauper boy with a yo-yo. The boy is kicked out of the palace by the king's men, whereupon the diminutive magical creature Nicky Nome appears to help him, giving him a flying carpet to travel to a valley of jewels. When Ali Kazam attacks on a vulture, Nicky gradually transforms the carpet into a Chevrolet motor car and the villain is defeated.