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Dave is a disgruntled tooth fairy.  Slightly below average in all of his endeavours, he has become bitter, out-of-shape and longing for change.  There are two things in life that Dave wants more than anything:  a job working as a Mood Fairy, helping to the spread joy and happiness to all of mankind; and Jade, the beautiful Christmas Tree Fairy, who never gives him a second glance.

When Dave fails a second opportunity to join the Mood Fairies (due to his habitual less-than-averageness) he becomes more embittered than ever.  Even his childhood best friend Crystal (who secretly loves him) nor his doting Fairy Godmother are able to lift his spirits.  As Dave watches everyone around him move on and flourish while he is left behind, so too do the Goblins, whose constant failure to overthrow the Fairy government is beginning to wear their patience…

The Goblin leader, Anthrax, spots an opportunity in Dave’s bad mood to use him.  He convinces Dave to assist the Goblins in exchange for Jade’s love – something only darker Goblin magic can procure – and the job he desires.  Dave agrees and in no time, Jade agrees to be his girlfriend.  Anthrax then asks Dave for a favour – he needs Dave to devote his working time as Tooth Fairy to collecting only rotten teeth, which he must then hand over to the Goblins.  Confused but happy with the way things are going, Dave agrees and even begins leaving better prizes – more money, sweets – under the children’s pillows to encourage children not to look after their teeth.  Anthrax then asks Dave to help the Goblins gain access to the Mood Spreader – the machine in the Mood Division used to spread joy and happiness to all of humankind.

The day that Dave plans to break the Goblins into the Mood Division, he runs into Crystal, who has barely spoken to him since he started dating Jade.  Harried and exhausted, she tells him she has been working overtime lately to combat the increase of bad moods in the human world, which cause the Fairies to become weaker and the Goblins to grow stronger.  When she explains that the bad mood is caused by something called toothache, Dave realises what the Goblins are planning and that only he can prevent it.

He rushes to warn Jade, saying he needs her help.  He has already handed all the rotten teeth over to the Goblins – he needs Jade to help him keep them out of the Mood Division.  Jade agrees and tells Dave to go home and get some rest, saying she will be back before midnight – when Dave was due to meet the Goblins – to help him figure something out.  However, when Dave wakes up, he finds himself magically tied up and unable to move.  There is a note left for him saying “If you ever want to see your girlfriend again, you’ll stay out of our way.”

Terrified for Jade’s safety, Dave tries to contact Crystal.  However, the person who answers her magic mirror is Jade, who informs him that the Goblins needed a Mood Fairy operative to help them use the machine and who better than Dave’s oldest friend?  Realising the Goblins have Crystal and that his relationship with Jade has all been a trick, Dave summons all of his strength and fury, breaks the spells holding him and charges off to save Crystal.

Dave tries to go to the Fairy Godmother and the Fairy Army for help, but he is too late.  The Goblins filled the Mood Spreader with rotten teeth and spread the misery of toothache throughout humankind, making the Fairies too weak to fight.  Having never required cheeriness to sustain himself, Dave goes on alone to face the Goblins, ready to take them all on himself to get Crystal back.

He goes first to the Mood Division, intending to turn off the machine and finds Jade standing guard.  She confesses that she is forced to work for the Goblins because, without them, she could begin to age and lose her beauty – their dark magic has the power to keep her young and perfect.  Disgusted by her selfishness, Dave tells her that he will never see her as beautiful again because now he knows how ugly she is on the inside.  He offers her the chance to do something good – to help him.  Contrite, Jade lets him pass and offers her beauty to counter the rottenness of the toothache ruining everyone’s moods.   She casts the spell that starts the machine extracting the loveliness from her face, hair and body and waves Dave away, telling him to save Crystal.  En route to the Goblin Kingdom, Dave realises that he himself is as guilty as Jade is, letting her beauty blind him to the person she really was when all along there was a real life wonderful Fairy who only ever wanted what was best for him…

Upon arrival at the Goblin Headquarters, Dave finds Crystal imprisoned in a dark corner as the Goblins celebrate their victory over the Fairies.  He sneaks in and gets to her cage, but finds her already lifeless and cold.  Thinking he is too late, Dave turns his rage on the assembly of Goblins who, presuming he has also been struck down by the human misery and would therefore be very weak, laugh at his anguish.  Mustering all his power and strength, Dave casts a spell on the entire Goblin court, pouring all the love he had for Crystal into their blackened hearts.  They all fall to the ground (or freeze).

The bars imprisoning Crystal’s body fall away and Dave rushes to her side, gathering her into his arms.  Holding her close, he apologises and explains why he did what he did and how stupid he felt for never realising how he felt about her when they had time.  During his speech, the dankness of Goblin HQ grows lighter and friendlier, birds begin singing again…and Crystal wakes up.  She accepts his apology, tells him she feels the same and they kiss.  When the Goblins awaken, they appear changed.  They smile and shake hands with each other.  Amiably, they apologise to Dave and amble away

Dave is honoured by the Fairy Godmother for successfully changing the Goblins into far better creatures, which has made the human race much more cheerful.  Subsequently, the Mood Division job is much easier, meaning it is within the realms of Dave’s capability.  He becomes a Mood Fairy at last.

As for Jade, it is decided that Christmas Tree Fairies should be made of plastic in future, so as to avoid a dangerous preoccupation with looks, which Dave has proved do not matter in the slightest.  Jade, no longer beautiful, takes over from Dave as the Tooth Fairy, as she is ashamed to show herself in daylight.  In fact, she has become so ugly that children are frightened of the Tooth Fairy, which encourages them to take better care of their teeth.

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