The story begins during King Taskan IV's reign, following the end of a civil war. Hype, the champion of the kingdom, is being rewarded for his loyalty and valor by being presented with the powerful Sword of Peace. However, during the ceremony a mysterious and powerful black knight riding a dragon unexpectedly appears. The knight steps to the King and demands the throne. At that moment, Hype steps before the knight and attempts to confront him, but the black knight is too strong and with the use of powerful magic, transforms Hype into a statue of stone and casts him deep into the past. Two hundred years earlier, Hype's statue appears in the courtyard of an apprentice magician: Gogoud.
Soon after his adventure in the Castle Arbarus and the breathtaking rescue of Hugolina, Hugo is in trouble again. Scylla has him captured and imprisoned. He now needs to escape from her magic castle.
The evil witch Scylla (Afskylia in the original Danish version) is back and has made a plan to rid herself of the troublesome good troll Hugo once and for all. She uses her powers to trap Hugo in the titular magic mirror that she then cracks it into three pieces and magically scatters the fragments across the world. Scylla also once again kidnaps Hugo's wife, Hugolina. Now Hugo and Hugolina's three children, Rit, Rat, and Ruth (Trollerit, Trollerat and Trollerut), are the only ones who can free their parents.
