Legend

                    The dreams of youth are the regrets of maturity.

The story is set "once, long ago" in a world of unicorns, fairies, goblins, and demons. Hidden in a dark lair, the antagonist, the Lord of Darkness (Tim Curry) instructs his goblin servant Blix (Alice Playten) to locate the two unicorns that roam in the nearby forest and remove their horns. If the unicorns die and their horns are removed, the Lord of Darkness can ensure that dawn never again breaks, and sunshine never returns.

In the forest, Jack (Tom Cruise), a young hermit, meets with his love, Princess Lili (Mia Sara). As one of few forest dwellers allowed to locate the unicorns, Jack takes Lili to see the creatures, while followed by Blix and her two cohorts Pox and Blunder. The unicorns appear, and Lili ignores Jack's pleas not to touch them. As Lili approaches the unicorns, the goblins attack with a poisoned blowpipe dart, hitting the stallion. The unicorns bolt, but neither Lili nor Jack notice the attack.

Jack chastises Lili for ignoring his warnings. Despite this, Lili sets a challenge for Jack by throwing her ring into a nearby pond and claims that whoever recovers the ring shall be her suitor. Overcome by the venom, the stallion has its horn removed by Blix. The unicorn's death causes a fierce snowstorm, the pond freezes and Jack is unable to locate the ring. During the storm, Lili hides in a cottage owned by Nell, a woodland dweller, but finds that Nell and her family have frozen as part of the curse brought on by the taking of the unicorn's horn. Lili hides in time to avoid arriving goblins, and overhears clues that explains the cause of the disaster. As the goblins ride off, Lili swears to undo her mistake.

Meanwhile, Jack meets Oona, Honeythorn Gump, Brown Tom, and Screwball (a fairy, an elf, and two dwarves). In order to obtain the fairies' help, Jack correctly answers a riddle put to him by Gump. The group then sets off on their quest and finds the lifeless stallion without its alicorn. Gump and Jack conclude that the alicorn must be found at all costs, and only then will the world return to normal. Jack and the fairies leave Brown Tom with the female unicorn to find weapons for Jack. Lili runs back to tell Brown Tom that the goblins are coming for the female, and tries to help him, but they are discovered by the goblins. After a skirmish, Lili and the surviving unicorn are taken to the Lord of Darkness. Jack, who has been fitted with armor and a sword, is happy to learn that Lili is still alive. The comrades overcome many obstacles to reach the Lord of Darkness' lair, where they witness the evil Dark Lord trying to seduce Lili with his charm and power. Lili seems able to resist the seductions, but then she asks for the privilege of killing the surviving unicorn.

Jack and his friends discover that sunlight will destroy the Dark Lord, because he tells Lilly so in a very loud voice, and gather large metal dishes to use as reflective shields, positioned around the castle in an effort to channel sunlight into the lair. The Dark Lord brings Lili to the unicorn, and Jack's friends encourage Jack to shoot Lili with an arrow to prevent the animal's death. Jack ignores their pleas, trusting his love. Lili cuts the unicorn free instead and is knocked out by the angered Lord of Darkness. Jack appears and confronts the Dark Lord, but he is undersized and outmatched. As defeat looms, Jack plunges the stallion's horn into the Lord of Darkness' chest just as the last shield is set in place and sunlight strikes the Dark Lord, causing his destruction.

Jack tries to revive Lili, but she remains asleep under a spell. Jack dives into the pond and recovers the ring. As Jack slips the ring onto Lili's finger, the Princess awakens. Lili takes the ring off and returns it to Jack. Jack is invited to return to Lili the next day, then she returns home. As Jack runs off into the sunset, Gump, Oona, and the rest of the group, including both unicorns, wave goodbye to Jack, his quest now concluded.

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