In a Monkee spoof on fairy tales acted out in pantomime, the Narrator introduces Michael, a cobbler, David, a tailor, Micky, an innkeeper and Peter who is out of work, all living in a town called Avon-On-Calling. Peter is a vagrant, because his concentrations on getting a job are stunted by his admirations for Gwen, a beautiful, yet selfish, conceited and overbearing princess. The other guys try to convince Peter to forget about the princess since she's out of his league, but Peter declares that he loves her so deeply that he'll sever his right arm to please her just as Princess Gwen arrives on a carriage which ends up stuck and the mud. Princess Gwen (Michael in drag) calls for help.
Peter offers to carry The Princess across the mud but she rudely disdains his suggestion and instead orders him down on the ground so she can honors his spine with a walk across it, followed by her fiancée Harold, a knight and troop of the soldiers, and soon Princess Gwen starts barking orders to get the carriage out of the mud within 10 minutes or she won't marry him and soon they depart. Later at Micky's Inn, Harold and fellow knight Richard order food are soon served fruit, bread, pig, wooden chairs, wooden benches and studio lights! Then Peter learns that Harold plans to do away with his fiancee and tries to warn Gwen but he is interrupted by Harold and Richard who arrive with leftovers for the Princess. Peter is back on the ground again as Harold once again walks on him. Just as they prepare to leave, the princess tosses Peter a tin locket she was wearing before they leave. Back at Micky's Inn, Peter tells the others of Harold's murderous plans. Then he bites down on the locket convinced it's a worthless piece of junk made of tin; suddenly, a fairy is released in a puff of smoke (in curlers because she was having her hair done) declaring she's The Fairy of The Magic Locket. The guys tells her about Princess Gwen so she decides to help them save her by telling Michael to make shoes that can scale walls, Micky to forge a kitchen knife into a sword that can cut through iron, David to sew a suit of mail and Peter to collect unemployment while his friends are working. She then warns Peter she'll be killed if he drops, crushes, or loses The Locket, because she lives there. Soon Michael, Micky and David set to work to make all the things required for Peter's armor.
Meanwhile, the Princess is locked up in the castle dungeon by Harold's toady, Richard, just as The Monkees dragged a now suited-armed Peter to the forest to save her. On the way to her rescue, Peter meets Little Red Riding Hood (David), Hansel and Gretel (Micky and David), and Goldilocks (Micky) before arriving at the castle's gate. There he encounters a fierce Dragon Of The Moat, who decides to let Peter enter rather than fighting him (as he is sick of violence) should he guess a riddle correctly. Peter doesn't know the answer to the riddle but The Dragon lets him enter anyway and orders the bridge to be lowered. It turns out to be a trap as Peter encounters the deadly Richard. But Peter's Magic Locket successfully protects him against Richard's sword and mace and chain, and Richard flees. Then Peter scales the walls of the castle and enters the dungeon to rescue the Princess. However, the ungrateful Princess says she only loaned him the The Locket and demands it back, so Peter hands it over just as Harold and Richard arrive. Peter tries to fight them with his sword but is unable to unsheathe it without The Locket which the Princess adamantly refuses to return, and he is taken prisoner as well.
Meanwhile back at Micky's Inn, Micky, Michael and David begin to regret sending Peter to save Princess Gwen alone; suddenly, they recieve a message from the Town Crier: Peter, Peasant of Tork, is slated for execution for tresspassing on Knight Harold's estate! The three then set out in search of the castle in hopes of rescuing Peter. After searching for the castle for three days, Micky suggests they split up, leaving a trail of bread crumbs behind them wherever they go and follow them back. They all take off in different directions and meet the Fairy Tale characters, with Micky encountering Little Red Riding Hood and David, Goldilocks. The trio rendezvous at the castle "they said no man could get in alive!", where they are at first scared off by The Dragon Of The Moat but later after answering his riddle correctly, they are allowed to enter just in time to stop Peter and Gwen from being shoved over the precipice by Harold and Richard. A wild battle erupts with an army but since both Peter and Harold hate violence they decide to arm wrestle instead. Peter seems to losing so Princess Gwen reluctantly tosses The Magic Locket back to him; he then overpowers Harold, forcing him and Richard surrender.
After Harold and Richard have been captured, Princess Gwen thanks Peter and offers to grant him any wish and the others urge him to propose to her. When he does, she refuses his request and whips off his hat, wig and makeup, revealing to be Michael, and declares that he can't marry anyone, because he's already married! They all wrap up the episode by giving a brief speech to the audience before singing the Monkees theme and hilariously departing.
Michael is interviewed about his role as the princess, and Micky, with Moog synthesizer, sings "Daily Nightly", in an impressive black-and-white number shot on the bandstand in their pad, while Michael, Peter and David look on.