During World War I, young Dorothy Grant comes home from finishing school and informs her parents that she is going to contribute to the war effort by organizing a "Girls Aviation Corps". She has uniforms made and hires a veteran of the Spanish-American War to teach her "cadets" military routines and drills. Her father owns a munitions factory and is always telling her to be on the lookout for spies. She convinces herself that the family butler, Williams, is a spy because he cuts his grapefruit in an odd way. It turns out that Williams isn't a spy but the people whom Dorothy least suspects are in fact spies, and they discover that Dorothy knows the password to get into the factory after hours.

The fairies of Oz gather in the forest of Burzee one evening and weave a magic cloak that gives the wearer one wish, so long as it has not been stolen.