An energetic child with a vivid imagination, Toby Morgan discovers the "magic attic" that was once his father's childhood playroom. There, Toby is surprised to find a stuffed velveteen rabbit. The boy's tears magically bring the toy to life. Before long, Toby is frolicking in the enchanted attic with a whole new group of friends, including the impetuous Horse and the wise but skittish Swan.