A young boy and a witch must fight a troll who has taken over an apartment building.
The Potter family consisting of Harry Potter Sr., Anne Potter, Harry Potter Jr. and Wendy Potter arrive at their new apartment complex in San Francisco. While Wendy is searching for her ball in the laundry room she is grabbed by something. Harry looks for and finds Wendy however he is startled by her as she acts strange. During dinner time Wendy grabs the bag of burgers Harry Sr. brought and runs out the apartment with Harry Jr. running after her. As Wendy is running around she pulls the fire alarm causing Peter Dickinson to come out of his apartment and complain to Harry Sr. about his kids. Harry Sr. meets a few more neighbors including Barry Tabor and Jeanette Cooper and her boyfriend William Daniels. Another neighbor named Eunice St. Clair comes down the stairs and angrily asks who set off the alarm and tells the others the fire department is outside.
The next morning Peter is in his apartment with his girlfriend. He asks her how last night was and then tells her to make them some pancakes for breakfast and she angrily storms out. Wendy goes to Peter's apartment and he lets her inside thinking the knock at the door is from his girlfriend. He gets annoyed with Wendy and tells her to leave, but she starts to play a disappearing game with him. She eventually transforms into a Troll and pricks Peter with a needle on the Troll's ring. Peter transforms into a seed cocoon which opens and vegetation pours out and new trolls are born. Harry Jr. goes to Eunice's apartment and asks if he can come in. He tells her his sister is acting weird and strange things are happening. After he fully introduces himself to Eunice she tells him the door is always open to him. While playing outside Wendy is almost hit by a car retrieving her ball, but is grabbed out of the way by Malcolm Mallory. Wendy asks Malcolm if he is an elf and then creepily looks at him and calls him "brother elf". Wendy goes to Barry's apartment and asks him what death looks like when he tells her he has stared it in the face. She then transforms back into the Troll. Barry grabs a rifle and shoots the Troll but the bullets have no effect. The Troll then stabs Barry with his ring needle and Harry Jr. hears his screams. A new group of trolls erupt in Barry's apartment.
The Potters have dinner with Malcolm who they assumed would be another kid since Wendy invited him. Meanwhile Harry Jr. is in bed watching a movie about pod people from Mars taking over the bodies of Earth people. At the dinner table, Malcolm recites the the Fairy Queen for the Potters on request of Wendy. As Malcolm recites the piece the trolls react and sing in a foreign language. Eunice senses the change and tells Galwyn it has started again, and then blows a horn which causes the singing from the trolls to stop. The next day, Harry goes to Eunice's apartment and asks her if she is a witch, while Wendy goes to Jeanette's apartment and gives her some flowers. Eunice tells Harry Jr. about her past and how she studied magic under Galwyn. Harry Jr. asks Eunice if she can teach him magic and she tells him she might not have enough time. He tells Eunice he thinks his sister is an alien pod person from Mars. At Jeanette's apartment after already being transformed by the Troll, she emerges from a cocoon covered in vines. Eunice introduces Harry Jr. to Galwyn and tells him they have very little time and to keep his eye on his sister. William stops by Jeanette's apartment but she doesn't answer the door. The door suddenly opens and William goes inside and the room transforms into a forest. Jeanette starts running and William runs after her until he runs into both Jeanette and the Troll.
Wendy goes to Malcolm's apartment and he tells her he has terminal cancer. Eunice takes a spear and knocks on the doors of the other apartment dwellers but she realizes she is too late to help them. Harry Sr. opens the door and asks Eunice if anything is the matter and she tells him all the other residents have disappeared. In his apartment, Malcolm is transformed into a troll. As Harry Jr. is going to Eunice's apartment he sees the other apartments starting to grow vines under the doors. Eunice tells Harry Jr. about the history of the war between the fairies and the humans which the humans won. She says Torok, which is the name of the Troll, wants to reclaim the area back into fairy land and Eunice is there to stop him. Eunice says Wendy is still alive as Torok will save one fair haired human to serve as the queen of the fairies. She gives Harry Jr. a spear to use against Torok's Beast and then regains her youth.
Harry Jr. goes back home while Eunice goes to the different apartments to cleanse them and appears in the fairy realm. She has her spear stolen by Torok's Beast and has to run back to her apartment. She picks up a sword and is confronted by Torok and he uses his ring's magic against her. Harry Jr. senses something is wrong and goes back to Eunice's apartment and finds her transformed into a tree stump. He enters the fairy forest and finds Wendy asleep in a glass case which he unlocks with the spear Eunice gave him. Torok's Beast attacks him and he drops the spear which Torok takes. The apartment building starts to erupt with plant life as people look on. As Torok's Beast is about to attack Wendy, Torok yells at it to stop and then kills it with the spear when it doesn't listen. The fairy forest starts to separate from the apartment building and then the two become separated and the apartment building and apartments go back to normal. Eunice congratulates Harry Jr. and walks of and the Potter family get into their car and leave to file a police report. Second Policeman tells the gathered crowd to go home and then asks First Policeman thinks about what happened. First Policeman thinks one of the kids had his radio too loud and then walks into the apartment. He opens the laundry room door and is pulled into the fairy forest where he is confronted by Torok and the door closes.