In 740 AD, in England, the mighty magician Merlin has three apprentices. One, Maxim Horvath, betrays his master by joining forces with the evil sorceress Morgana le Fay. Morgana mortally wounds Merlin before another apprentice, Veronica Gorloisen, is able to rip Morgana’s soul from her body and absorbs it into her own. As Morgana attempts to kill Veronica by possessing her from within, the third and final apprentice, Balthazar Blake, stops her by imprisoning Morgana and Veronica in the “Grimhold”, a magic prison in the shape of a nesting doll. Before dying, Merlin gives Balthazar a dragon figurine that will identify the Prime Merlinean, Merlin’s descendant and the only one able to defeat Morgana. While he searches for his descendant throughout history, Balthazar imprisons Morganians, sorcerers who try to release Morgana, including Horvath, into successive layers on the Grimhold.
In 2000, in New York City, 10-year-old Dave Stutler, encounters Balthazar in his Manhattan antique store, after straying from his school field trip. When Balthazar gives Dave Merlin’s dragon figurine, the statue comes to life and wraps itself around the boy’s finger to form a ring. When Balthazar goes to retrieve a book meant to teach magic, Dave accidentally opens the Grimhold, releasing the imprisoned Horvath. While battling for possession of the Grimhold, Balthazar and Horvath are imprisoned in an ancient Chinese urn with a ten-year lock curse. Dave is then ridiculed by his classmates when he claims he saw magic, only to find the shop empty. He is faced with severe bullying, and is misdiagnosed with hallucination caused by a “glucose imbalance”. David nevertheless keeps the ring.
Ten years later in 2010, Dave, now 20 years old, is a physics student at New York University, and meets his childhood crush Becky. He immediately becomes smitten with her, and repairs the transmitting mast of the radio station she works at after it is struck by lightning. The ten-year imprisonment curse of the urn ends, releasing Horvath and Balthazar. Horvath pursues Dave and the Grimhold. Balthazar rescues Dave, riding an animated steel eagle adapted from a Chrysler Building gargoyle. Dave initially refuses to help Balthazar, having been under psychiatric care since their first meeting, until the elder agrees to leave after finding the Grimhold. They track the Grimhold to Chinatown, where Horvath has released the next Morganian, Sun Lok. Dave defeats Sun Lok, and Balthazar retrieves the Grimhold. Dave changes his mind, deciding that he likes magic after all, and agrees to become Balthazar’s apprentice. He also becomes romantically involved with Becky against Balthazar’s wishes and advice, impressing her by playing the OneRepublic song “Secrets” with the Tesla coils he has been experimenting with. Horvath enlists a youthful Morganian, celebrity magician Drake Stone to get back the Grimhold. They attempt to kill Dave, but Balthazar saves him. Cued by Horvath, Dave demands to know the truth about Balthazar’s quest. Balthazar reveals that Morgana is trapped in the Grimhold with Veronica. Morgana, if freed, would cast a spell called “The Rising”, which would revive sorcerers from the dead and enslave mankind. As Prime Merlinian, Dave will become powerful enough to cast spells without his ring (a focus, which for any other magician is the only way to channel their magic), and is the only one who can stop her. Despite Balthazar’s disdain of his relationship with Becky, Dave convinces to allow him to meet her for a date. Dave tries to use magic to clean his lab, but loses control of his animated cleaning mops and forces him to cancel his date with Becky. He is saved because of Balthazar’s intervention and, disillusioned, decides to give up on magic, until Becky unknowingly changes his mind.