This story takes place in a typical American neighborhood, when some new neighbors come to live in the house next to Ray Peterson. These new people are really strange; nobody has ever seen them, their house is a real mess, and during the night you can hear weird noises from their basement. The only thing they know is their name: Klopeks. One day Walter (an old man of the neighborhood) suddenly disappears and everyone starts to suspect the Klopeks...

From a riddle-speaking butterfly, a unicorn learns that she is supposedly the last of her kind, all the others having been herded away by the Red Bull. The unicorn sets out to discover the truth behind the butterfly's words. She is eventually joined on her quest by Schmendrick, a second-rate magician, and Molly Grue, a now middle-aged woman who dreamed all her life of seeing a unicorn. Their journey leads them far from home, all the way to the castle of King Haggard...