The Magic Pencil is about Jason, a physically- handicapped 15-year-old boy who lives with his single mom and older brother. They're very poor and can barely pay their bills. One morning, he finds a raggedy rainbow-colored pencil in his school lunch box. Picking it up, he starts doodling in his notebook. To his surprise, whatever he draws comes to life. He draws an apple, and it appears on his desk. He draws a carton of milk, and it also comes to be. Overwhelmed with excitement, he darts out of class and dashes home.

He shows it to his mother and starts to draw food, clothing, and money which all materialize instantly. His mother takes the pencil and draws a refrigerator but nothing happens. No matter what she draws, it doesn't work for her. She gives it back to her son and again whatever Jason draws magically appears.

Soon the government finds out and takes Jason to a lab to study and exploit his gift. They make him draw weapons, spaceships, and precious stones like diamonds, gold, and uranium. He realizes that they're using him for their greedy motives and plans his escape. But he has no idea how to get away so he expresses his frustrations by writing words and drawing pictures around them. He then cries, and in a fit of anger starts erasing his words and drawings. To his amazement he finds that whatever he draws then erases—disappears. He looks at his pencil and smiles.

Immediately, Jason begins drawing and erasing all the government officials guarding him. He quickly runs home to his mother and proceeds to erase every town, city, and country in the world except for his house. Then he writes down all the beautiful and peaceful words he can think of and pencils in the earth around them.

Now, he has created a beautiful Disney-like fantasy setting where his family, friends, and the entire world's population lives in peace, love and laughter for now and forever after .