The story begins in the land of Ithiron, where three great nations have dwelled in peace. The Nafilites, the Asmachites, and the Andros. The king of the Nafilites has just passed, and the Andros have broken the great alliance. The Asmachite and Nafilites unite with a resistance force in an attempt to defy this new power, but the dark wizard Raginmar has drawn up a new evil, the Torvuul, and the nations flee into exile in the strange lands of magic to the east. There nothing is as expected and they are lost and wandering, unable to find others within the lands nor to return to Ithiron to reclaim their home.

As the introduction to the film ends, we see the present day state of the exiles. Tensions are high amongst the peoples, who are beginning to badger on each other because of being Nafilite, Asmachite, or the two Andros who accompany them, the lead Vermundo and his younger cousin Ferdinand. During a night of feasting and partying, these two sneak away with two younger Nafilites. As they are gone, an attack by the first creature the land exposes to them, the Wendmark drives the exile camp into a frenzy. Oblivious to this, the four adventurers get their first taste of the inhabitants of the land when they meet the strange Buziba, a Mogmot. These creatures are a small swamp dwelling race with grey and green skin and long strangly hair. He leads them to his mother, who in turn decides they must go to The Great Thema, who is their ruler. She, in turn, seizes them and determines them not safe so as to benefit by selling them in the Great Slave Market of Temuth-Rimble.

The exiles, meanwhile, have given the four over for dead, fearing the land would change and they would be lost. Tensions rise in fear of dying out in these lands. The great king Frithrik begins to lose his mind, killing his eldest friend and advisor. This leads to complete chaos among those seeking to rule the exiles. More blood is spilled, and the young prince escapes with his father. There in the wilderness Frithrik realizes what he has become and forces his son, Hakan, to leave him tied to a rock to die and to return and lead their people.

The four adventurers meanwhile suffer their own scares. They are taken to the temple of the mogmots, which they must pass through the cleansing ritual of these people. The young girl, Eos, is safe, but the three boys must try and escape the great creature who guards the passage to the mogmot swamp. In the end, Buziba's mother sacrifices her life for them, and Buziba rescues the three and takes them out from the mogmots, leaving Eos to her fate. The new party of four meet the elf guardian who refers to himself as The Oracle. He saves them from the suckholes and wetworms of the Foggy Marshes and brings them to a watch tower which protects Ethelon, the land of the elves, from those around them.

Meanwhile, the exiles discover Hakan and accuse him of killing his father. He leads them to where he left him tied and find an already greatly decayed body, due to the strange magic of the land. This deceit causes Brynja, the sister of Hakan to leave the camp, unable to take her brother and the people. She becomes lost in the wilderness, but is saved by the were-elf Feras, who is the brother of The Oracle. They return to the watch tower and a reunion of exiles occurs. This new party then sets off so as to bring Vermundo and the exiles with him to the one who can return them to their lands. As they journey they meet the troll Mizbit and learn of changes within this land, of the rising of a new power in The Delegation, which rules over the lands.

As the search continues, Eos witnesses the brutality of the slave trade, the exiles become a part of this as the land which once seemed to trap them is realized as protection from the people there. The exiles are caught, and the elves and their watch realize their quest may be in vain. As the film draws to a close, a great realization that the power they fled from Ithiron has finally reached out and the dark magician is finishing off what he began. They only hope is with the elven guardians and those who accompany them.