Pinocchio has been a real boy for a year. So his creator, Geppetto makes him a cake to celebrate. After a visit from the Pinocchio's Fairy Godmother (who had turned Pinocchio into a real boy), Geppetto realizes that he must deliver a precious Jewel box to the Mayor. Pinocchio persuades Geppetto to allow to take the box and makes his way to the Mayor's house. Pinocchio also takes with him his hand-make glow worm, which magically becomes real when Pincoccho gets distracted by a Carnival that has come to town. Pinocchio names his glow worm Willikers and decides to take a peek at the Carnival, despite Geppetto telling him not to go anywhere near it. Nearby, Scalawag and his colleague Igor advertise a three-shell game which cheats people out of their money, leading to Scalawag's and Igor's escape by using a cannon to get away from the angry mob. Scalawag meets Pinocchio and trades the Jewel box a ruby, which turns out to be a fake when Pinocchio gets home, which angers Geppetto.