The short opens on a poster announcing the magician Presto Digiotagione and his Hat of Wonder. It then moves out to show a rabbit, Alec Azam, in a cage. Alec is hungry and there's a carrot on the table next to him, but he can't quite reach it. Presto then enters the room. He looks at a watch and freaks out a little- he doesn't have long before he's supposed to begin his act. He then swiftly locks the door to his room, opens a drawer, and after making sure nobody's watching, he opens the drawer's false bottom to reveal two hats- a top hat and a pointy wizard hat.
Presto puffs some smoke into the wizard hat, and the smoke appears in the top hat. He then sticks his hand through the wizard hat- it too appears from the top hat. Presto brings both hats over to Alec, who's optimistic that Presto might feed him. Presto takes Alec out of the cage, but carries him past the carrot, and stops him whenever he tries to walk over. Presto puts the wizard hat on Alec and gestures to him to be patient. He then practices the 'pulling a rabbit out of a hat' trick, pulling Alec through the wizard hat and out the top hat. He then picks up the carrot and prepares to feed it to Alec, but before he can, the beginning of his act is signaled. Presto then picks up both hats and Alec (whose mouth is still open in expectation of food), and walks onstage, with Alec (equipped with the wizard hat), on a table just backstage.
Presto begins his act. He produces the top hat, shows the audience that there's nothing in there, and, to a dramatic drumroll, sticks his hand inside- and gets nothing. Alec has taken the wizard hat off, and Presto's hand is grasping at thin air. Presto tries to gesture to Alec to put the hat back on, but Alec refuses. He wants Presto to feed him first. Presto is under pressure to perform his trick, and he furiously grasps for Alec, who simply turns the wizard hat in different directions and then slaps it against the table, causing Presto to withdraw his hand in pain.
Presto starts walking backstage, and Alec promptly puts the hat back on. Presto resumes his trick, but instead gets his fingers caught in a mousetrap, which gets a round of applause from the audience. Presto bows and then glares in Alec's direction. Alec had put the opening of the wizard's hat down near the mousetraps, and when Presto glares at him, he tries to signal to Presto to feed him. Presto does not get the message, however, and since the wizard hat's opening is pointing towards Alec, he drops an egg into the top hat. Alec quickly turns the wizard hat upside down, so the egg returns through the top hat and hits Presto in the eye.
That gets applause, so Presto puts on the top hat and bows, but then turns to Alec, takes out the carrot, and turns it into a flower. Alec is not amused, and points the wizard hat into an air duct, causing Presto's head to get sucked through the top hat. Presto manages to get the hat off, but his face has turned red and he's got a very interesting new hairstyle. The audience applauds, and Presto bows slightly before again glaring at Alec, who still wants Presto to feed him. Presto tries the rabbit-out-of-the-hat trick once again, but Alec shuts his hand into a drawer.
While the hand's still stuck, Alec pulls magician props like cards, flowers, and ribbons out of the sleeve. Presto sees it and runs screaming towards Alec, who points the wizard hat directly at Presto, causing the magician to poke himself in the eye. While blindly grabbing for the wizard hat and Alec, Presto manages to pull his own pants off. Alec finds this hilarious, but then Presto gives him a Death Glare and gets ready to kick him. Alec then drops a ladder through the wizard hat. Since the top hat is underneath Presto, it gets him between the legs.
Presto sees that the ladder is very long and gets a plan. He holds the ladder back while pointing the top hat at Alec, and then lets go. Alec dodges, the ladder hits the door behind him, and as it falls it ends up pushing Presto across the stage. Presto breaks off a part of the ladder, takes out the carrot, puts a handkerchief over it- and then beats the crap out of it with the ladder fragment, horrifying Alec. When Presto next tries to grab him through the wizard hat, he points it at an electrical board, electrocuting Presto and causing him to pick up a square dance broadcast (the orchestra rolls with it).
After this, Presto has had enough. He chases Alec around backstage, but accidentally causes himself to be hoisted up to the top of the theater. Alec rejoices, but Presto is terrified. And then the rope holding him breaks, sending him plummeting down to the stage, followed by a moon decoration, several star decorations, and a piano. Alec's jubilation suddenly turns to horror, and he saves Presto by getting the top hat directly under Presto when he falls. Presto falls into the hat and through the wizard hat, ending up safe and sound on the stage.
The audience is very impressed, giving him a standing ovation and throwing roses onstage. Presto is happy about that, but Alec, not so much. He begins walking away. Presto gets him to come back by revealing the carrot from before, totally whole. Alec returns, eats the carrot, and takes a bow with Presto. The short ends with a shot of Presto and Alec's new poster, with a bouquet of roses for Presto and a bouquet of carrots for Alec beside it.
