A poor miller is about to drown himself in the lake when its nixie appears, offering a chest of gold if he repays her with the next thing born in his home. He accepts but before his pets give birth, he and his wife have a child. The nixie cannot leave the water so they warn the boy, Franz, to avoid the lake. Years later after his parents' deaths, Franz ends up near it after a hunt, and the nixie captures him. His wife Heidi tries to reclaim him, and in the lake meets a spirit who tells her how. She offers Heidi gold objects to be used by the lake periodically so they will distract the nixie and Franz can escape. But the nixie's attacks make it difficult to keep them.