In London, England, a large figure emerges from under a bridge, sniffing the air. He smells gold! Phy, a troll, disguises his grotesque features under a trench coat and hat and sets out to follow the scent of gold. He curses as he loses the trail, but quickly senses it again down an alley. He muses that the coat hides his troll features well, but in this modern world London is full of different faces. He reminisces about the old times when Vikings and Celts fought long ago and trolls were a force to be reckoned with.
Phy climbs up a drainpipe and peers inside a bedroom window. Inside, a young man is working on his chemistry homework, studying the properties of different metals. As he reads aloud about gold, lead, platinum, then gold again, the pen he’s using turns into each of those metals! Thomas’ mother calls him downstairs to dinner. He’s glad for the break as chemistry always gives him a headache, unaware that it’s his mutant abilities manifesting causing him pain.
The troll hops through the open window into Thomas’ room and picks up the gold pen. He wonders if it is some type of magic and bites down on the pen. It is indeed solid gold! He surmises that Thomas is a master of alchemy and has control of the elements, enabling him to turn lead to gold. Phy plots to carry the boy off, using him to create enough gold for the trolls to reclaim England for all who live by the old magical ways. He slips into Thomas’ closet and awaits the boy’s return.
Meanwhile, on the other side of the Atlantic, X-Factor’s Ship hovers off the New York coastline. Jean and Warren watch the New Mutants from above during a training session. Jean comments that adolescence is hard enough for humans, but mutant teenagers have to deal with the trauma of their emerging mutant abilities. She withdrew into a deep depression when her powers developed and Warren tried to hide his wings. Warren reminds her that is why they formed X-Factor, to rescue kids and adults like them and help them control their mutant gifts. Jean wonders that with how many mutant children and teenagers they have, would sending them to school or training them for combat be best for them.
Below, Cannonball easily blasts through the obstacles Warlock has created for him. Dani holds her throbbing head in her hands and remarks that her powers have been acting strange. Rahne tells her it might be from the demons they fought, or maybe it’s just the flu.
Boom-Boom watches Sam training, pouting over his lack of attention towards her. Roberto reminds her that Sam’s girlfriend is lost in space, possibly dead. Tabitha mutters that he should pay attention to her and throws one of her time bombs in Cannonball’s direction.
Beast quickly dives after the time bomb and redirects it with his foot. It ricochets off of Skids’ forcefield and Cyclops disables the bomb with an optic blast. Iceman reprimands Boom-Boom for endangering Sam. She brushes him off, that Sam is invulnerable when he’s blasting and the time bomb was more noise than anything else. To her surprise, Cannonball springs to her defense, telling the others Tabitha is more responsible than she looks and how well she fought against the demons. Cyclops reminds her that although Sam was invulnerable, the others could have been hurt. Tabitha affectionately rubs Hank’s head and says she would never do anything to hurt him and she’ll be more careful. Hank and Bobby are puzzled by her sudden change in attitude, while Tabitha gushes at Sam for coming to her defense.
Jean, still watching from above, notes the change in Boom-Boom as well. She says they all have changed, most of all her. The memories from Madelyne and Phoenix have brought a feeling of darkness to her soul and she fears it. Warren tells her to fight it, that she is the strongest of them all and will always stand in the light.
Back in England, Thomas returns to his room after dinner. As he searches for his pen, he sniffs the air around him, which smells like dirty feet. Suddenly, Phy bursts through from the closet and grabs poor Thomas. He wraps the teenager in a sheet and starts out the window with him. Phy tells Thomas that he will make gold for the trolls, that he has the Midas touch. Thomas, unaware of his mutant power, tells the troll he’s been reading to many nursery stories.
Thomas grabs hold of the window ledge and starts screaming for help. His mother rushes in to see her son being carried away by a troll and whacks Phy over the head with her broom. Phy and Thomas fall to the ground. Mrs. Jones grabs a lamp to look out in the darkness but cannot see any sign of her son or the troll. The window ledge she leans against, that Thomas had desperately clung to, shines as it has been turned to gold.
Meanwhile on Ship, everyone is taking some time to relax. Scott marvels at being able to hold his son after thinking he had lost him forever. He comments that perhaps life doesn’t have to be painful, that all the kids seem to know how to enjoy it. Jean replies that the kids, as well as themselves, deserve some happiness.
Warlock has skewered some hotdogs while Rusty roasts them with his mutant flames. As Boom-Boom looks on, Rictor uses his power to shake the soda in her hand. Liquid explodes all over Tabitha’s face as she opens the soda can, and she takes off after Rictor.
Jean approaches Danielle and asks her if something is wrong. Dani replies that she has a headache and her horse, Brightwind, isn’t feeling well either. Jean feels Dani’s forehead and notes that she does feel warm and that Dani should go to the doctor the next day if she doesn’t feel better.
Ship snaps a photograph of Scott and Nathan together. Ship then informs the team that a mutant giant has kidnapped a boy named Thomas Jones and his mother has called for X-Factor’s help. The teenagers all encourage the team to go save the boy and promise to be responsible while X-Factor is gone.
Ship constructs an aircraft to transport the team to London. As they prepare to leave, Scott realizes he still has baby Nathan with him. As he starts to hand the child over to Cannonball, Jean suggests they take Nathan with them. She has his bottles and diapers packed and Nathan needs the security of being around his father after nearly being kidnapped by Nanny and a monster recently attacking Ship.
X-Factor arrives at Ophelia Jones’ boarding house shortly before dawn. Mrs. Jones is surprised by how tall the X-Factor members are and that they have a baby with them. Beast jokes that they are trying to make a world record for the super hero team with the youngest member. Mrs. Jones fails to understand Hank’s humor and tells the team that a giant carried her son off and turned her windowsill to gold.
The team sets off in search of Thomas and Beast finds a crushed can that’s been turned to gold. They follow a trail of items that have been turned to gold, leading them to a hidden door beneath a bridge. Hank tries to push the door but it won’t budge. Cyclops quickly demolishes it with his optic blast and X-Factor enters a cavern full of treasure. As they venture further, they find televisions, refrigerators, even cars-all turned to gold!
Suddenly, the team turns around to find they face not one giant, but five. Hank realizes that they are trolls, not giants. Phy calls for Phough, Phumm, Phay and Phee to attack. Archangel mutters that shouldn’t that be “fee, fi, fo,fum”, but Cyclops comments the trolls probably haven’t been reading the right fairy tales. Scott hits Phay with an optic blast while Warren battles Phough in the air. His wing knives have no effect on the troll’s diamond-hard scales, and Beast’s attempt at using Judo against Phee backfires and Hank is slammed to the ground.
Iceman encases Phumm in a sheath of ice and wonders how their adversaries can all be trolls when they look so different. There is no such thing as trolls, so Bobby figures they must be mutants. Phumm tells Iceman he has been called an Abominable Snowman, but it’s just a fancy name for a plain, old-fashioned troll. He was born and bred in snow and ice and quickly smashes through the layer of ice and strikes Bobby.
Phee threatens to grind Hank’s bones to make his bread and Archangel quickly flies to Beast’s aid. He is no match for the huge troll and is quickly taken down with one punch from Phee. Jean protects Nathan Christopher in a telekinetic shield and slams Phy against a wall with her power.
Cyclops continues to battle the shape-shifting Phay, but Phough punches him in the back of the head and knocks him down. Jean cries out as Scott falls, and Phy uses the distraction to knock her down.
The trolls have formed an alliance, as humans no longer fear them or leave tributes when crossing troll bridges. Humans mistake them for mutants, but it will be one mutant who will help the trolls use economics to destroy humanity. The team is introduced to young Thomas Jones, whose powers the trolls plan to use to turn everything to gold. The resulting inflation will shatter England’s economy and the humans will leave, allowing the trolls, fairies and elves to take over. X-Factor, bound in gold chains, is alarmed by the troll’s plans of domination. Suddenly, Jean realizes that Nathan Christopher is missing!