Poor Tom is an orphan, employed by the underhand Grimes as a chimney sweep. While cleaning a chimney one day, Tom becomes lost and appears in Ellie's bedroom. She mistakes him for a thief and he flees in fright, down to the edge of a stream where he falls asleep. In his dreamlike world, he becomes a water baby, swimming with the other water babies and discovering an aquatic playground full of strange and wonderful characters.