Rachel's adventure begins when she breaks her pencil during a test. Her teacher hands her a short, gnaw-marked pencil to use. Disgusted, Rachel reluctantly finishes the test and then starts writing in her journal. She soon discovers the stubby pencil possesses a talent she does not have: the ability to write stories.
As Rachel holds the pencil and it writes, the pencil reveals a tale about a kidnapped unicorn. The unicorn's friend, Prince Jacob, has set out to rescue the unicorn. Soon Rachel finds herself writing more and more, eager to find out if Prince Jacob will every find the unicorn.