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Annie, left orphaned after the death of her mother, goes to live in an orphanage where she tells her fellow orphans stories of ghosts and goblins. The matron of the orphanage finds Annie's closest relative, the abusive Uncle Thomp. Her uncle who puts her to hard work doing hard labor on his farm, belittling her all the while. Big Dave, a neighbor and tough cow-poke sees this and comes to her aid. Dave becomes her protector. Eventually Annie goes to live with Squire Goode and his large family. There, she entertains the children of the household with her stories, but sees her abusive aunt and uncle as her chief tormentors. She tells stories of how the goblins will take away the children if they are not good. Each story she tells is illustrated. War breaks out and Dave, who Annie adores, enlists. Uncle Thomp, hearing that Dave has been killed in action, takes pleasure in telling Annie the news. Broken-hearted, Annie falls ill and dies in bed, surrounded by family.