Josie and her brother Tom play separately on either side of the room, when suddenly they end up in a fight. Their father Brian, having been slumped miserably in his seat, sits up straight and reprimands them. As they continue to bicker, he decides to tell them a story to distract them.
The story is about a dragon that terrorizes a village, leading to fear, poverty, and starvation. The king in this story is a lazy man who does nothing about the problem and is indeed strangely civil with the dragon, conversing with it like friendly acquaintances. In Brian's story, a boy comes to defeat the dragon with a 'large mysterious bag.'
The children keep interrupting the story, which frustrates Brian - who in turn makes it more suspenseful because he is enchanted by his own eloquence. Josie, in particular, wants to know what is in the boy's mysterious bag, but Brian never reveals that. He ends the story swiftly with the death of the dragon and goes off to work, leaving the children irritated. Josie realizes then that her father himself doesn't know what is in that bag, even though he is the storyteller.