Best friends and outcasts, Gas, Prissy, and Truman denounce their town's prejudices and become friends with Angel, one of the new residents of the Enlightened Home for Girls. The home began as an orphanage 150 years before, right after an alleged witch was killed and her baby stolen.
Mindy, once a resident of the enlightened home and a descendant of the murdered witch, moves into the original building. She wants to rescue Angel from the home because Angel is magical too, and she wants to get revenge on the descendants of those who killed her ancestor and John Patrick whose family has owned the home ever since it began as an orphanage. She uses her magical flute to lure Angel from the home.
One by one, more people fall into Mindy's trap. Prissy, whose dad sits on the board of directors of the home, Molly Patrick, daughter of John Patrick, Molly's mom Barb, Truman's dad Dwight, and finally Truman and Gas. Mindy threatens to wipe the memories of the three girls and to disappear with them forever unless she gets what she wants: her revenge and improved conditions at the home.
Mindy loses some of her anger after learning that Garland, Prissy's dad, lived in the home with and they were best friends until the flute lured her away. Truman devises a plan so that she can get everything she wants without anyone getting hurt. Mindy lets Barb and Truman speak to Miss Lucinda whose family has worked at the home for its entire existence. Lucinda confesses that her ancestors took the baby into the orphanage and that the Procters kept them and quiet with blackmail. Guilt-ridden and tired of the way the girls have been treated, she says she will tell the proper authorities anything they wanted to hear about Procter and the family's history. Her testimony and Angel's would give John a lot of trouble that he doesn't want.
Truman and Barb Procter then tell John Patrick that if he doesn't meet with Mindy, Lucinda will tell the world about the way he's run the Enlightened Home. Even if he isn't arrested, the girls' families will sue him for malpractice and his reputation will be ruined. He reluctantly agrees to come.
John does go to the home, but he brings the sheriff to take his daughter back by force and arrest Mindy. However, the magic of the woods. a two-way mirror, and Ralph the talking dog combined the valiant efforts of Truman and Gas defeat both the sheriff and John. The sheriff doesn't even remember where he is and John agrees to leave Magic and give the home to his wife to run.
Angel is happy that she has a home. Molly and Gas are happy because they have discovered more than a passing interest in one another, Prissy and Truman are happy for the same reason, and Mindy is happy because she's reunited with her best friend and possibly more.
The home is in Barb Patrick's capable hands, and Ralph the talking dog enjoys having his belly rubbed as he recovers from his gunshot wound.