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A discarded silk top-hat becomes the focus of a struggle between a washed-up stage magician and a group of schoolchildren, after it magically brings a snowman to life. Realizing that newly-living Frosty will melt in spring unless he takes refuge in a colder climate, the magic snowman and Karen, a young girl whom he befriends, stow away on a freight train headed for the North Pole. Little do they know that the magician is following them, and he wants his hat back!