Martin, a woodcutter, lives with his wife Grete in a small house on the edge of the forest. He starts his day's work with a good sandwich. Suddenly, he hears someone calling his name.

The voice comes from an oak, where an unlucky fairy is trapped. The fairy, grateful that Martin has saved her, gives him a ring that will grant him three wishes. He rushes home and tells Grete about this miraculous occurrence, and they are greedy with wishes. Grete has Martin give her the ring and sends him off to ask the schoolmaster for advice.

In her dreams, Grete can already see herself as a lady in noble dress, but when their neighbour Kaspar walks by with a beer barrel, it is her spoken wish of having a large bowl of sausages to accompany the beer that is immediately granted instead.

When Martin returns home and sees the big mess, he takes the ring away from Grete and, full of anger, wishes Grete's nose into a long sausage, which happens in an instant. Whether they like it or not, they now have to use the third wish to undo the previous one.