A girl walking in the woods is captured by an evil dwarf. He takes her home and forces her to keep house for him. Thanks to a beautiful fairy and the mice she takes care of, she escapes.
It's a fairy tale straight out of the Brothers Grimm, with some nice special effects for the era, and a nice framing device: it's presented as a grandmother showing young children a picture book, which expands to tell the tale. Although the versions I have read lack the fairy godmother, and rely on various magical devices to aid her escape (a comb is thrown to the ground, to become an impenetrable forest, and so forth), this Melies-style special-effects extravaganza is quite charming.