Kantarou is asked by his publisher to investigate and write about the mysterious disappearances of children.  When he arrives he meets an old friend and she tells him of the happenings.  He sets out to meet the Lord of the Mountain and talk to him.  He finds out that he is a white goblin (a man that turned into a goblin) and that he knows Haruka.  Meanwhile, several of the children, including Suzu, have wondered off and touch a rock that has been sealed.  The old Lord of the Mountain is released and the dragon creature seeks vengeance on the town.  It's up to Kantarou to send him back to the heavens or seal him up once again.