In 740 AD, in England, the mighty magician Merlin has three apprentices; Balthazar Blake, Veronica Gorloisen and Maxim Horvath. Horvath betrays his master by joining forces with the evil sorceress Morgana le Fay. Morgana mortally wounds Merlin before Veronica 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, Balthazar 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.