One night Peter is spotted and while trying to escape he loses his shadow. On returning to claim it Peter wakes Marys daughter Wendy Darling. Wendy succeeds in re-attaching his shadow to him and Peter learns that she knows lots of bedtime stories. He invites her to Neverland to be a mother to his gang.

Wendy agrees and her brothers John and Michael go along. Peter and the Lost Boys build a little house for Wendy to live in. Soon John and Michael adopt the ways of the Lost Boys.