In the early 1980s England, we meet Kevin Lotterby (played by Craig Warnock), an ordinary 11-year-old boy with a deep fascination for history and its myths. Unfortunately, his materialistic parents, David Daker and Sheila Fearn, seem indifferent to his interests, preferring to spend their evenings engrossed in game shows rather than engaging with their son.
One fateful night, after being sent to bed early, Kevin watches in astonishment as an armored knight bursts out from his wardrobe. This surreal moment finds him whisked away to a tranquil forest clearing, only to have his bedroom reappear as if nothing unusual transpired. Just as he starts to ponder this strange occurrence, his father storms in, upset over the noise and ordering him back to sleep.
Determined to document any more peculiar happenings, Kevin returns to bed the next night equipped with a Polaroid camera and a flashlight. His patience is tested, but just as he begins to drift off, a band of six oddly-dressed dwarfs emerges from the closet. They mistake him for "The Supreme Being," and hilariously interrogate him about events he knows nothing of. While pushing him against a decorated wall, they accidentally discover a hidden tunnel, igniting a wild adventure.
Their escapades lead them through a portal to Italy in 1796 amidst the Second Battle of Castiglione. They stumble upon a fortress where Napoleon Bonaparte (portrayed by Ian Holm) is enjoying a Punch and Judy show. As fate would have it, the dwarfs showcase their dancing skills, captivating Napoleon, who appoints them as his new generals. Seizing the moment, the dwarfs rob him of his plunder before narrowly escaping.
Their journey through time continues as they accidentally crash into a carriage occupied by a betrothed couple, Vincent and Pansy (played by Michael Palin and Shelley Duvall), and soon reveal to Kevin their true purpose. They confess to working for The Supreme Being as creators of life's wonders, but after a mishap with a foul-smelling tree, they were demoted to portal repairers and decided to steal treasures to make themselves rich.
Their misadventures lead them into the presence of Robin Hood (played by John Cleese), who aims to redistribute their loot to the needy. Meanwhile, they are observed by a malicious sorcerer known as "Ultimate Evil" (portrayed by David Warner), who seeks to possess their time-map for his own nefarious purposes.
As Kevin grapples with his role in the chaos, he unexpectedly encounters King Agamemnon (played by Sean Connery), falling through a portal into the king's court after aiding him in vanquishing a Minotaur. Here, Kevin experiences the warmth of a family he longs for, capturing moments with his camera, but this peaceful interlude is shattered when the dwarfs return to whisk him away once more.
Their next destination? The ill-fated Titanic. As the ship sinks, the dwarfs uncover the location of a fabled treasure, leading them back to the Fortress of Ultimate Evil, where they face a plethora of challenges. They encounter Winston the Oger (portrayed by Peter Vaughan) and his wife Katherine Helmond, taking command of their ship to escape a giant's wrath before embarking on a desperate quest for the treasure within Evil's lair.
Inside the Fortress, they are tricked and imprisoned by the shape-shifting Evil. It takes teamwork, quick thinking, and resourcefulness for Kevin and the dwarfs to plot their escape. In the heat of chaos, various historical figures join them for a climactic showdown against Evil, who ultimately meets a fitting end at the hands of The Supreme Being (played by Ralph Richardson), revealing his true nature as both creator and observer of their journey.
In the end, Evil's remnants inadvertently find their way back to Kevin's home, leading to a disastrous confrontation that brings Kevin back to reality. As he watches his parents' indifference to danger lead to their demise, he realizes the impact of the adventure—one that leaves him with Polaroid snapshots as proof of his incredible journey. The film draws to a close as the camera pans out to reveal the larger cosmos, sealed with The Supreme Being rolling up the map, indicating that the story transcends beyond just Kevin's experiences.
