Upon Bowie's death in 2016, the single version of "Magic Dance" reached #63 on the iTunes chart in the UK.

[4] "Magic Dance" was written for a scene in which Jareth and his goblins entertain a crying baby that has been wished away to them by the film's heroine, Sarah Williams.

In the film, Bowie performs the number with Toby Froud as the baby, and 50 puppets and 12 costumed extras as the goblins.

[5] Described as a "simple dance number that's driven by electric bass and emphatic drums",[6] "Magic Dance" includes song lyrics that refer to the film The Bachelor and the Bobby-Soxer (1947) starring Cary Grant and Shirley Temple, in which the two have a call and reply verse: "You remind me of a man."

"[1] "Magic Dance" is the third track on the Labyrinth soundtrack, released in July 1986 to coincide with the film's US premiere.

[16] Some critics have observed similarities between "Magic Dance" and Bowie's earlier song "The Laughing Gnome", as both are constructed around traditional nursery rhymes and feature comic goblin/gnome voices.