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|Laurence Harvey||Wilhelm Grimm|
|Karlheinz Böhm||Jacob Grimm|
The story focuses on the Grimm brothers, Wilhelm (Laurence Harvey) and Jacob (Karlheinz Böhm), and is biographical and fantastical at the same time. Both are working to finish a history for a local Duke (Oscar Homolka), though Wilhelm is more interested in collecting fairy tales and often spends their money to hear them from locals. Tales such as "The Dancing Princess" and "The Cobbler and the Elves" are integrated into the main plot. One of the tales is told as an experiment to three children in a book store to see if publishing a collection of fairytales has any merit. Another tale, "The Singing Bone", is told by an old woman (Martita Hunt) in the forest who tells stories to children, while the uninvited Wilhelm secretly listens through an open window. The culmination of this tale involves a jeweled dragon and features the most involved usage of the film's special effects.
Eventually, Wilhelm loses the manuscript of the Duke's family history while writing down this third story - he is actually supposed to be collecting additional information for the family history - and the brothers cannot meet their deadline. So they are required to pay their rent, which was withheld while they worked. Meanwhile, because he was wading through a stream in an effort to retrieve the manuscript (which fell into the water after his briefcase broke open), Wilhelm becomes critically ill with pneumonia and lies at death's door. He dreams that at night various fairytale characters come to him, begging him to name them before he dies. The experience causes the fever to break and Wilhelm recovers completely, continuing his work as his brother publishes regular books such as a history of German grammar and a book on law. However, Jacob, shaken by his brother's experience, now begins to collaborate on the fairy tales with Wilhelm.
The two are ultimately invited to receive honorary membership at the Berlin Royal Academy, which makes no mention of the tales in their invitation. But as the train pulls into the station and Jacob prepares to make a speech deliberately insulting the Academy for snubbing Wilhelm, hordes of children arrive, chanting, "We want a story!" Wilhelm begins: "Once upon a time, there were two brothers". The children raise their voices in a loud cheer, and the film ends.