Sabrina and Daphne Grimm are two young sisters whose lives were turned upside down when their parents disappeared. Now that they're living with their Grandma Relda in Ferryport Landing, they know that they're descendants of the brothers Grimm. But the fairy tales written by the brothers aren't fiction — they're histories of the magical beings known as the Everafters, who are magically bound to Ferryport Landing and live among normal humans. The descendants of the Grimm brothers are tasked with keeping the peace in Ferryport Landing, solving magical mysteries and keeping the Everafters locked in the town.
The book opens with 11-year-old Sabrina Grimm waking up in a building to find a Jabberwocky staring down at her. Sabrina has been searching for her kidnapped parents. Her investigation led her to the Jabberwocky, a monster from Alice's Adventures in Wonderland, and its master, a little girl in a red cloak.
Sabrina's fairy friend, Puck, distracts the Jabberwocky while Sabrina confronts the little girl. The girl has Sabrina's parents, who are under a sleeping spell. The girl claims that they're her parents and that all she needs to complete her family are her grandma and her puppy. Before Sabrina can save her parents, the little girl uses magic to disappear with them but leaves the Jabberwocky behind to deal with Sabrina and Puck. During their encounter, the building catches fire, and they escape from the monster. Puck calls his pixies and commands them to find Grandma Relda, but Sabrina falls asleep before her grandma arrives.
Sabrina wakes up in the hospital three days later with a broken arm that she injured while facing the Jabberwocky. After Grandma Relda arrives, Sabrina tells her about the Jabberwocky and seeing her parents. Relda tells Sabrina that the building is nothing but ash now, so any leads to her parents' whereabouts are gone.
At home, Sabrina is eager to identify the little girl in the red cloak by checking the Grimm family's journals, but Relda stops her, saying she needs to rest because she is concerned for Sabrina's safety. After everyone is asleep, Sabrina reads the journals secretly and learns that a sword known as the Vorpal blade is the only thing that can kill a Jabberwocky. She also finds a list of inmates at the Ferryport Asylum. She recognizes Little Red Riding Hood's name and realizes that Red is the girl who kidnapped her parents. The journal says that Red has delusions, hallucinations and homicidal tendencies.
Sabrina wakes Daphne and Puck to help her investigate the building where she faced the Jabberwocky. She's realized that the building was actually the Ferryport Asylum. They find Red's file but are confronted by a strange man before they can leave with the information. The man manages to steal the file from them and escape.
The next morning, Grandma Relda takes Puck, Sabrina and Daphne to the dedication of the new elementary school, which was built by a group of witches. Mayor Charming, a.k.a. Prince Charming, is angry that the Grimms are there because the ceremony was intended for Everafters only. He lets them stay but warns them to keep out of the way.
The Queen of Hearts, who says she's tired of Charming allowing the Grimms to run around the town freely and cause trouble, interrupts Mayor Charming. She blames the Grimms for the destruction of the first elementary school. Then she announces that she intends to run for mayor in the upcoming election.
Some of the Everafters threaten the Grimms. Suddenly, the man who stole Red's file appears and uses magic to stop the Everafters. When the altercation is over, the man hugs Grandma Relda. It turns out that he is Jake, her son.
When the family returns to the house, Jake is surprised to see that Grandma Relda hasn't decorated for Christmas. To remedy the situation, he gives Sabrina a magic wand and teaches her how to use it. But Relda takes the wand away because she doesn't want Sabrina to learn to rely on magic.
That night, Sabrina tries to steal Red's file from Jake while he's asleep. He awakes and suggests reviewing the file together. Sabrina learns that Red went crazy after the Big Bad Wolf killed her family. Now she's trying to bring them back by stealing people. She and Jake realize that Red wants to kidnap Grandma Relda. Sabrina is afraid she won't be able to protect Relda because of her broken arm, but Jake says he can fix it. He uses a magical mixture to mend the break. Jakes says he's surprised that Relda didn't fix the arm already since there is a supply of the mixture in the Hall of Wonders.
The Hall of Wonders is a realm that exists inside the Magic Mirror where magic items are stored. Jake takes Sabrina into the mirror even though Relda had forbidden it. When Relda discovers the two in the Hall of Wonders, she tells Jake that the girls aren't ready to use magic.
The next morning, Jake takes Daphne and Sabrina on a tour of the town to show them where he and their father spent their days. Puck goes along, too. Against Relda's wishes, Jake teaches Sabrina to use the magic wand. Later, Jakes takes them to eat at The Blue Plate Special.
Red and the Jabberwocky arrive at the diner, and Red demands to know Grandma Relda's location. Sabrina tries to kill the Jabberwocky using the magic wand, but it has no effect. When Puck enters the fray, the Jabberwocky rips his wings off, and Puck begins to die. Sabrina threatens to kill Red but is stopped by Daphne. Red escapes.
At home, the sisters learn that Red had been magically sealed into the Ferryport Asylum but escaped when Jake temporarily disabled the magical barrier to let one of the Everafters escape the town. Jake and the sisters decide to find the Vorpal blade so they can kill the Jabberwocky and cut through the magical barrier. That's the only way they can return Puck to the Faerie folk to be healed.
The blade was broken into three pieces, but Relda has one piece. When all three pieces are together, the Blue Fairy can repair the blade. A clue on the first piece leads Sabrina, Daphne and Jake to the Little Mermaid and the second piece of the blade. The clue on the second piece leads the trio to the witch Baba Yaga.
The witch agrees to trade her piece of the blade for Sabrina's wand. Sabrina has become obsessed with the power the wand gives her, and she doesn't want to give that power away. Daphne convinces her to make the trade, but Sabrina changes her mind and takes the wand back. When Baba Yaga catches her, Sabrina grabs one of the witch's wands and tries to turn the witch into a frog. But her plan backfires. Sabrina holds the wand incorrectly and turns herself into a frog. After Sabrina the frog, Daphne and Jake manage to escape, they encounter Mr. Canis, a friend of Relda's. He tells them that kissing someone with royal blood is the only way to reverse the frog spell, so they ask Mayor Charming to kiss Sabrina, and she is restored.
Now that they have all three pieces of the sword, the trio must find the Blue Fairy. It turns out that the Blue Fairy is a waitress at The Blue Plate Special. After Sabrina steals a car, she and Daphne drive to the diner, only to find that the Blue Fairy is at the elementary school. As they leave the diner, Red shows up with the Jabberwocky.
Sabrina and Daphne drive to the school with Red hot on their heels. They find the Blue Fairy, who can grant wishes, and she fixes the blade for them. After Jake uses the Vorpal blade to kill the Jabberwocky, he grabs the Blue Fairy and holds the blade to her throat. He demands that she grant his wish: to have her power. When the wish is granted, he starts taking the Everafters' magic, and they begin to die. He also brings his father back from the dead and offers Sabrina a wish. She wishes that Jake always knew that his family was his power, not magic.
The wish transports them back to the moments after Jake killed the Jabberwocky. This time, he doesn't threaten the Blue Fairy. They discover that Red has been working for someone else, and Relda tricks Red into showing them where Sabrina's parents are. They're still under the sleeping spell, and the only thing that can break the spell is a romantic kiss from someone who truly loves them.
Sabrina, Daphne, Grandma Relda, Mr. Canis and Sheriff Hamstead use the Vorpal blade to leave Ferryport Landing and take Puck to Faerie to be healed.