From his perch on the tree, Billy watches the tiny bark shutters open and sees a tiny old man peeking out. Then, he realizes that similar tiny windows all over the tree are opening, and more tiny people are peering out at him. The man explains that he and the other tiny people are the Minpins. They own the forest. He and his companions are able to walk vertically in the tree branches because they all wear suction boots.

The other Minpins emerge from their tiny homes within the tree, and the old Minpin tells Billy that the entire forest is made of hollow trees; thousands of Minpins live in them. There are staircases and many rooms inside the trees. He explains that Minpins live in other forests around England, and he invites Billy to look inside the tiny window to see his home.

When Billy peeks inside the tree, he sees a beautiful tiny home that reminds him of a dollhouse. The old Minpin explains that he is the Ruler of the Minpins, so he has one of the nicest houses. His name is Don Mini. The other Minpins are eager to show him their houses as well.