Lost in old silver mines, terrifying happenings befall Thomas and Caitlin, until they meet the mysterious Blue Fish who lives in an underground lake.
Thomas and Caitlin live in a remote part of Wales during the Dark Ages. The area is controlled by a kindly earl who lives at Caerdraig (Castle of the Dragon) but whose ancestors were greedy and untrustworthy.
Farmers in the surrounding district are plagued by thefts of animals and crops. Some claim that huge lizard-like creatures, said to live in the nearby forest, are responsible.
The family is poor. Hoping to find silver, Thomas and Caitlin venture into old silver mines under the forest. They rapidly get lost and are captured and imprisoned by a large carnivorous lizard, only managing to escape when a giant spider chews through the bars of their cage.
Afterwards, their situation improves when the mysterious Blue Fish, who lives in an underground lake and guards a securely-locked chamber containing undisclosed secrets, befriends them. She entrusts them with a mission, the key to which is contained in a riddle.
Further adventures follow, some frightening, some humorous, during which they solve the riddle.
Running through the whole story is the influence of Emrys, an aged magician, who in his youth was Merlin's apprentice. Blue Fish, and the dragons they meet, are his allies