Caroline takes her sisters Catherine and Fantaghiro to the market. There, a blind magician named Lenox amazes the public by creating very realistic looking shadow figures. When Fantaghiro calls him an illusionist, Lenox becomes offended and, with the help of his magic walking stick, causes dreams that seem very real to come upon those present. All this frightens poor Caroline and gives Fantaghiro a strange feeling.That night, Lenox, in conspiracy with the Black Witch, induces in Fantaghiro a dream about the Holy Beast and the Cemetery of Dragons. When she awakes she is all set to go to the Cemetery right away, for which she must go to Lenox and ask for his help. Romualdo begs her not to let herself be carried away by her imagination. They have a big argument and the brilliance of Fantaghiro’s pendant starts to wave.Fantaghiro presents herself alone before Lenox and he causes her to dream about the Cemetery of Dragons. Golden Mane, who has watched all that has taken place, gallops to th