One day, the stepmother sends her to watch the sheep while pulling heather from the field, giving her stepdaughter pancakes with flour that has been mixed with ashes as her only food.
The little fellow accepts them, and for the girl's kindness, he gives her three magical gifts: to grow even more beautiful, that a gold coin will fall from her mouth whenever she opens it, and her voice sounds like music; and finally that she will have a young king for a husband.
The stepsister acts rudely to the little man, refusing to share her food when he asks her to, hitting him instead with a stick her mother gave her.
Because of this behaviour the little man curses her with becoming even uglier than she already is each day, that a toad to fall and a bull's bellow to come out from her mouth when she opens it, and that she will suffer a violent death.
After visiting his family after the incident with the little fellow with the red cap, when he comes back to the palace he can't stop talking about how beautiful his sister has become.
Meanwhile the brother, who has miraculously survived inside the snake pit, has dreams about his sister coming to the castle as a duck and changing back if someone cuts her beak.
The stepsister is put in a barrel with spikes all around it, and dragged off by six wild horses, dying the violent death the little fellow told her, while the king marries Maiden Bright-eye and the brother becomes prime minister.