Peter Munk, [Lutz Moik], the charcoal burner, and his mother live in the Black Forest, where their dirt and the low reputation of their craft earn them disdain from the village’s wealthier inhabitants, who are cold-hearted yet secretly admired for their money. Peter longs to marry Lisbeth, [Hanna Rucker] the daughter of a widowed and impoverished lumberjack, who is to wed a wealthy man at her uncle’s urging.
Desperate to change his fortunes, Peter seeks out the forest spirit known as [Glasmännlein], who dwells in a remote clearing two hours away from any village and is said to grant three wishes to anyone born on a Sunday. The Glasmännlein grants two wishes at first, promising a third later if Peter isn’t too foolish. For his first wish, Peter asks to dance as well as the village’s best performer and to carry in his pocket as much money as a wealthy gambler, [Ezechiel]. For the second wish, he asks for money to buy a glassblower’s hut. The Glasmännlein scolds him for his vanity but grants both wishes nonetheless.
Back in the village, Peter becomes wealthy enough to fill the inn with dancing and gambling, chasing the thrill of luck and status. Yet his new life is hollow, and when he cannot pay his debts, the irony of his wishes strikes hard: he had won all day against [Ezechiel], but the sudden wealth he craved evaporates and the glassworks is put up for auction.
With marriage to Lisbeth blocked by creditors, Peter seeks another forest spirit, the dark giants Holländermichel, who agrees to heap wealth upon him but only in exchange for his heart—replaced with a heart-shaped stone. Holländermichel reveals that many of the village’s wealthier men have already sacrificed their hearts and now display them as trophies. Peter accepts the bargain and swiftly becomes ruthlessly prosperous, but the price is a cold detachment: he feels no pain, no compassion, and no love. He grows stingier, letting his destitute mother live in a miserable hut and driving beggars away from his door. His ruthlessness even leads to tragedy when, in a fit of anger, he kills Lisbeth, whom he had married, for giving wine to a frail old man—the man, as it happens, being Glasmännlein in disguise.
Overcome by despair, Peter seeks out the Glasmännlein in the fir-thick woods, hoping for a way to reclaim his humanity. The spirit confronts him with the consequences of his choices and suggests a trick to win back his heart from Holländermichel. The plan succeeds, and Peter is overwhelmed by remorse. The Glasmännlein then grants one final wish to undo everything: Peter must strike a tree with his axe, and when he does, Lisbeth appears among the trees. They walk hand in hand toward their future, restored to a love and life that had nearly been torn apart.
