Once upon a time, Peter, a lame boy who requires a crutch to walk, dreams of being able to dance like all the other children. His grandfather, Hans Schmidt, the village's spectacle maker, is presented with an opportunity by a mysterious man who walks into his shop: make a lens that when looked through makes everything and everyone appear beautiful, in return for his shop being filled with gold. Hans wants to oblige, if only to be able to fix Peter's leg, but first Hans has to learn what beauty actually is. In consulting with the wisest source he knows, Hans is able to produce such a lens which makes everything and everyone appear beautiful on the surface, and, in return, he is showered with gold. The mysterious man later returns explaining to Hans that the spectacle is deceitful in hiding the ugliness that lies underneath, and that he should produce a lens that should bring forth the truth to the surface. Hans, once again goes through the process, and produces such a lens though at the possible risk of his life as it does expose the true ugliness of the souls of some important people, namely the Duke and Duchess. In the end, the truth, in its power, may set them all free.