Big Claus is rich, Little Claus is poor, they both live in the same village. Little Claus makes the mistake of proclaiming to the village people all the horses he works are his. Big Claus gets angry as four of the five horses are his and in his indignation, kills Little Claus' only horse as punishment. Dismayed, Little Claus heads to market to sell the horse hide, but instead cons a farmer out of a bag of money in an little affair involving the farmer's wife, the deacon, a wizard and the devil...