In search of the missing Balder, Thor has come to the floating castle of the troll Slaggnbir where he is welcomed by a trio of lovely ladies. He politely declines any food and drink so they cast a spell which sends him hurtling toward the ceiling; Thor raises Mjolnir to crash through rather than be crushed and returns in an angry mood. The women summon their protector Annar who engages the Thunder God in battle. From his moves, Thor recognizes his friend Balder. A lightning blast knocks off the jeweled ring, belt, and neckpiece by which he was controlled and Balder regains his memories. The seductive beauties turn on the charm but Thor forces the magic ring onto one’s hand and they stand revealed in their true forms: troll hags. Thor destroys one with a hammer blow and Balder uses his light powers to drive the other two through a hole Thor breaks in the floor and they plummet to their deaths. The heroes take a moment to admire Thor’s new beard and Balder’s new powers….
Interlude: Just freed from prison, gangster Thug Thatcher goes to the home of his former moll Ruby Mortensen, who is now a suburban housewife and mother. When he discovers all memory of him has been erased from her mind, Thatcher decides to use her as a pawn in his scheme of revenge against Thor….
Outside the castle, Thor and Balder are approached by the old peddler woman who claims to be an enchanted beauty and that plucking a certain rose will break the spell. Thor does and it does—but the suspicious Balder slips Karnilla’s ring on her finger and she is revealed in her true form: Uglitha the Troll-Mother. She beats on Thor until Balder turns on his light, driving her backwards so that Thor can bring the floating castle down on her head. Balder decides to resign himself to being a king and the two head off to celebrate….