As the story begins, we are introduced to the idea that the Wizard controls all of the fairy tales and maintains the balance of good and evil in Fairy Tale Land. With the help of his assistants, the Wizard is checking to make sure that all the fairy tales under his care are "on track" to have their traditional happy endings. As we meet him, however, the Wizard is leaving for Scotland for a long-overdue vacation. He leaves the kingdom in the hands of his two assistants, the uptight Munk and the decidedly goofy Mambo .
Ella , who lives as a servant to her step family, dreams of the Prince who will sweep her off her feet. Her best friend at the palace is Rick , the palace dishwasher. Rick takes it upon himself to deliver the invitations to the royal ball to Ella. Ella sees Rick only as a friend, but Rick secretly loves Ella, although he is too cool and proud to admit it. Rick can't really understand what Ella likes about the Prince. Rick's Three Amigos, the comic chefs in the palace kitchen, believe that Rick has a bad case of "Prince envy". The Prince does everything by the book, and plans to meet his maiden at the ball.
However, things don't go as planned at the ball. Thanks to the assistants, Ella's evil stepmother, Frieda , gains access to the Wizard's lair during the Prince's ball. She manages to chase off Munk and Mambo and tip the scales of good and evil, causing a series of fairy tales to go wrong and have comically unhappy endings (including one where Rumplestiltskin wins his bet with the queen and takes her baby). She calls an army of trolls, witches, big bad wolves, and giants to her castle. Ella finds out and escapes to the woods, where she meets Munk and Mambo. The trio set out to find the prince who has gone looking for his maiden , in hopes that he will defeat Frieda and save the day.
Together, they flee to the Seven Dwarfs' home. Witches and trolls, led by The Ice Queen, attack them. The dwarfs hold off the trolls, while they flee with the help of Rick who had stolen a flying broom. Frieda decides to go after Ella herself. She succeeds in capturing her and returns to the palace, with Rick, Munk and Mambo in pursuit. Frieda tortures Ella because if the story had run its course she would have married the prince while Frieda would never get anywhere in life. Rick, Munk, and Mambo slip into the castle and attack Frieda. During the fight, Frieda generates a pit in the floor. Mambo knocks her in, but she uses her staff to fly back up again. After a short battle, in which Rick takes a blast meant for Ella and falls into a deep sleep, Frieda creates a portal by accident. Ella knocks Frieda back and punches her into the portal. Rick awakes from the spell and he and Ella kiss, finally admitting their feelings for each other.
Ella and her true love Rick decide to choose their destinies in a world of happy endings and get married. Rumplestiltskin has shown throughout the movie that he has come to care for the baby, and the queen lets him stay in the castle as the baby's nanny. Frieda is shown trapped in the Arctic surrounded by elephant seals.
