To get out of the desert, Valanice has to solve a number of ancient puzzles left over by some forgotten civilization. She does so and exits through a tunnel to the beautiful forest landscape. She makes her way to the strange town of Falderal, inhabited by talking animals. She learns of a magic statuette that will enable her to see where Rosella is. But to obtain it she has to get into Arch Duke Fifi Le Yipyap's birthday masquerade ball, as the statuette is located somewhere inside the Town Hall. When she finally finds it, she sees a vision of Rosella exiting the troll underground. But as she is about to leave, she accidently makes a large cheese fall from the sky. Believing this to be the moon, the people of Falderal seizes her as a criminal.
Meanwhile, Rosella explores the land of Ooga Booga. Most of its inhabitants are not very nice, such as the hideous Boogeyman and the mischeivous ghoul kids. But a few are nice and polite, like the gravedigger and the friendly Dr. Mort Cadaver. They help Rosella find the real troll king, and together they sneak into Malicia's nearby home to get a device needed to stop Malicia's plan, which they now know of. Malicia is trying to make the volcano controlled by the trolls erupt and destroy the land of Ehteria, which is the magical land Rosella saw in the lake. To stop it, they make their way to Falderal and enters a secret passage, also inside the Town Hall, that leads to a mechanical control room for the volcano. But in the control room they find the false troll king, and the two trolls tangle up in battle. Rosella now has to turn the false troll king back to his original form with a magic wand she got from the real troll king. But who is who?
Valanice manages to shoot the cheese she "stole" high up into the air and are therefore released from her imprisonment in Falderal. Now she makes her way to Ooga Booga, but Rosella has already left. Valanice helps some of the ghosts in Ooga Booga, and in return she gets a way to travel to Etheria among the clouds. Her quest to find Rosella extends to a quest to help Rosella save Etheria, and to do so Valanice has to get help from divine characters like the three Fates, the Dream Weaver and Mother Nature, but to get it she has to help them in return. Finally she meets Oberon and Titania, king and queen of the fairies.
Managing to tell the two troll kings
apart by the color of their eyes, Rosella successfully transforms the false
troll king back to his original form. And to her great surprise it turns
out to be Edgar, who she saved from the clutches of the evil fairy Lolotte
only two years ago, when she went to the land of Tamir in a quest to save
her father's life. Edgar had been kidnapped by Malicia and magically transformed
into her servant to realize her evil plan. Also, it turns out that Edgar
was not the son of Lolotte as Rosella believed, but the son of Oberon and
Titania, making Edgar a prince. But there is no time for further explanations
between the three, because right then Malicia enters and knocks out Otar,
magically transforms Edgar away and transports Rosella to a cliff edge
inside the volcano right above the rising lava. Rosella digs her way through
the walls though, and gets back outside of the control room. Meanwhile,
Edgar finds Valanice and brings her with him. Malicia is temporarily gone,
and Rosella manages to revive Otar so that he can stop the volcano from
erupting. Valanice and Edgar return and all of them are finally united.
But of course Malicia returns and spoils the fun. She kills Edgar and aims
for Rosella next. But Rosella is quick and uses Malicia's own magic against
her, transforming her into a harmless baby. The tragedy of Edgar's death
can also be averted because Rosella happens to carry an extra life in her
inventory, given to her by a black cat she saved the life of in Ooga Booga.
Oberon and Titania enters and are reunited with their long lost son, and
all are happy. Rosella travels with Edgar to his beautiful home among the
clouds and he asks her if he will have the honor of courting her. This
time, Rosella is more than happy to accept.