The cartoon starts with an introduction by the narrator of the story. One of the main characters, The Boy, who is reading a book about knights and bloodthirsty dragons, is introduced. His father comes rushing by, claiming to have seen a monster. The Boy reassures his father that it was only a dragon, to which the father panics and runs to the village in fear. The Boy then goes to the Dragon's lair, where he is confronted not by a ferocious beast, but a shy, poetry spouting creature. The Boy, though surprised at seeing what a nice creature the Dragon is, befriends him. When he arrives back at the village, the Boy discovers that Sir Giles the Dragon slayer has arrived. He runs to tell the Dragon that he should fight him, only to be left disappointed when the Dragon announces that he never fights. The Boy visits Sir Giles, and it is revealed that Sir Giles is an old man. The Boy tells Sir Giles that the Dragon will never fight and they decide to visit him.
Sir Giles and the Boy visit the Dragon while he is having a picnic. It turns out that Sir Giles also loves to make up poetry, so The Dragon and Sir Giles serenade each other. The Boy then asks if he could recite a poem of his own. From this, he uses his chance to get a word in edgewise to shout at them to arrange the fight. The Dragon leaves but is persuaded back out of his cave when he is flattered by Sir Giles. Sir Giles and the Dragon eventually decide to fight, but as Sir Giles and the Boy leave, the Dragon has second thoughts. The next day, the villagers have gathered to watch the fight. Sir Giles arrives waiting for the Dragon.
Inside his cave, the Dragon is too scared to fight and cannot breathe fire. An insult from the Boy leads to the Dragon getting angry and eventually spitting flames. The Dragon jumps for joy as he is now ferocious. The fight ensues, with Sir Giles chasing the Dragon around with his sword and into the cave, where they drink tea and make noises to make it seem they are fighting. Out in the open, they charge at each other, creating an enormous cloud. Inside they dance, and Sir Giles reveals that it is time for the Dragon to be slain, but only for pretend, to which the Dragon gets excited. Sir Giles places his lance under the Dragon's arm, then the Dragon jumps out of the cloud and performs a dramatic death scene. The story ends with the Dragon being accepted into society, to which the Dragon recites a poem:
"I promise not to rant or roar, and scourge the countryside anymore!"