A toyshop owner tells a little girl the story behind the two dolls she's fallen in love with. In Ragland, needles, thread, scissors and other sewing implements come to life to create the rag dolls Raggedy Ann and Raggedy Andy. On their way by toy camel to the Castle of Names, Raggedy Andy falls under the spell of a Spanish doll, breaking Raggedy Ann's heart. Andy hears of this and rushes to her side.