The famous pencil Mr. Pencil leaves his house and is bothered by some kids who want him to draw more. As he walks through Toronto, a police officer takes pictures of him until he is hit by a board, breaking his lead. Mr. Pencil is sent to The Hospital for Sick Children, where Debbie tells him that some kids in the playroom want him to draw for them. At the playroom, some musicians sing "Amen" for the kids, then they welcome Mr. Pencil, who will animate stories the kids make up. One kid tells a story where Mr. Pencil is sharpened, then repeatedly abused and eaten by a grandmother. Another kid turns the grandmother into the wolf from Little Red Riding Hood. A girl tells about a black knight whose tongue is a punching glove, and ends the story with Mr. Pencil being hit by a truck. Mr. Pencil would rather dance and sing, so they briefly do the Hokey Pokey. Jamie and Ryan give Mr. Pencil a pencil sharpener as a present; it fits him perfectly and he feels better.