While working in the forge of his father’s magic bag, Alex receives and accepts an invitation to join an adventure. Alex is soon reunited with some old friends and meets some new companions as he travels to the land of Thraxon, and they start their adventure in the dwarf city of Benorg, searching the vast collection of archives for information about their quest: to find Albrek’s Ring of Searching.
With some clues they discover, they begin traveling towards the Isle of Bones. Along the way they meet a mysterious paladin with his own quest, defeat a nagas, and add to their treasure. In the coastal city of Dunnstal they convince a captain to take them to the Isle of Bones, where they discover more clues about Albrek. Also while there, Alex meets with a dragon, Salinor, who reveals that Alex is both man and dragon.
Back on the mainland they continue south to Kazad-Syn, where Alex returns to a rightful heir one of the magical bags. Farther south they are attacked by hellerash and Alex loses Sharee before making it safely to city of Neplee. The city is cursed by the presence of a necromancer, whom Alex sets out to destroy. Victorious, he returns to his companions and they continue even farther south, finding dwarf ruins. Alex transforms into a dragon and convinces the thunderbird responsible for the city's destruction to stop hunting in the north. Finding the Ring, the company then sets out for the dwarf capital.
On the way back, the company stops by the Empty Tower, where Kat becomes the new Oracle. The rest of the company then returns the Ring of Searching, along with the Crown of Set, which Alex had found during the journey. The company then returns home, but Alex does not return to the normal world. Instead, he travels to Alusia, where Whalen has prepared him a home.