The Struutz family returns home to Bitterfeld (East Germany) in time to see their house destroyed to make room for a new golf course. However, their fate turns when father Udo receives word that he has inherited "Red Cap", a small garden dwarf manufacturer in Landwitz near Dresden. Upon their arrival in Landwitz, Udo finds himself confronted with fighting off Herman Kuhn, the charming and uncrupulous town mayor. Kuhn plans to destroy the peaceful life of Landwitz and turn it into a center for East-West trade. When Udo's wife Rita falls under the influence of Kuhn's charm and his daughter Jacqueline is tempted by the allure of the big city, Udo takes actin. He enlists the help of adventurer Charlie. Together they battle the odds in a ffight that takes them from Landwitz to Manhattan's rooftops and the Elbe sandstone mountains. Finally Udo triumphs over the impossible, saving Landwitz, "Red Cap" and his family.