Grandpa, an elderly villager in an impoverished community, compassionately invites a small-statured traveler denied shelter elsewhere into his home on New Year's Eve. He and his wife celebrate with the traveler, who promises to grant their unspoken wish for a child in return for their kindness. The traveler instructs Grandma to draw water at dawn from a spring at Mount Dodo's foot, then vanishes after expressing gratitude, leaving only a leaf. The next day, the couple finds an infant boy by the spring, confirming their belief the traveler was the New Year God.

They name the foundling Taro and raise him as their grandson. Twelve years later, Grandpa and Grandma still care for Taro in their village. Grandpa displays concern and authority when Taro repeatedly disobeys the village prohibition against riding near Mount Dodo, a restriction due to the dangerous mountain demon believed to reside there. Following renewed volcanic activity on the mountain, Grandpa admonishes Taro for his recklessness. This volcanic activity is later revealed as unintentionally caused by a weakened firebird within the mountain, despairing over failed flight attempts. After Taro resolves to aid the firebird and departs on a quest, Grandpa's direct involvement in the narrative concludes.