Fairies weave a magic cloak capable of granting its wearer one wish but cannot decide who should receive it. Finally the Man in the Moon suggests they give it to the unhappiest person they can find. This person as it turns out is Fluff (played by Mildred Harris), on her way to the land of Noland with her brother Bud (as played by Violet MacMillan), their Aunt Rivette and their pet mule Nickodemus to make a new life having just recently lost her {and Bud's} father. After receiving the cloak from the fairies, Fluff wishes for happiness and Bud as luck should have walks right into inheriting a kingdom, making Fluff a princess. Things are well until their pet mule Nickodemus gets captured by robbers and the 683 year old beguiling Queen Zixi of Ix decides to come looking for the cloak, wishing to make herself appear as young and beautiful in her own mirror as others already see her.
The main problem with this movie is it seems to lack focus. While entitled "The Magic Cloak of Oz", the title should probably instead read "The Startling Adventures of Nickodemus the Mule" since Nickodemus (wonderfully brought to life by Fred Woodward) and his animal friends garner most of the attention during this one's running time. Now Nickodemus is often delightfully amusing to watch and really his scenes tend to provide this one's funniest moments. Another problem for some may be there's not enough familiar Oz style characters in this one, aside from the animals and the demanding, soup-eating Rolly Rogues. All in all though, this one's flaws ultimately prove somewhat forgivable since it's such an imaginative journey into a childlike fantasy world.