Bastian's Mother is in a car accident. Bastian then meets Mr. Coreander, the owner of an old book store. Mr. C gives Bastian a book called The Neverending Story in exchange for a broken video game. Bastian's mother tells him that the book will guide him. Later, he wakes up and his mom is gone. He attends her funeral and has a hard time coping with her death. He begins reading TNES and becomes involved with the characters and events that occur in a mystical land known as Fantasia. He discovers that the land is in grave danger and his being ripped to shreds by dark force known only as ""The Nothing"". The Childlike Empress of Fantasia chooses a young warrior known as Atreyu(son of all) to combat the nothing to and to find a cure for her illness which seems to coincide with the poisoning of the land.

Mr. Blank (Bastian's teacher) claims that Bastian never handed in an assignment. Now Bastian has to redo the assignment during lunchbreak. Atreyu begins his quest against the darkness.

Bastian is so caught up with the book that he neglects his school work and his chores around the house. In Fantasia, Atreyu meets Fly Girl and finds out the luckdragon is a flying machine flown by Fly Girl.

When Bastian learns that nothing in Fantasia can exist without a name, he enlists Marley and Lucas to help him get rid of Mr. Blank by deleting all references to him in the school. Meanwhile, Atreyu joins up with Fly Girl and heads to the Southern Oracle