9-year old orphan called Rasmus runs away from the orphanage. He meets a vagabond they call Paradise Oskar who likes to sing and play his accordion. Oskar makes the Rasmus world seem like a better place.

Peter-No-Tail (Pelle Svanslös) is a cat who was born without a tail. He compensates this by studying hard and, much to the dismay of his arch-rival Magnus (Måns), he receives a fancy university degree very few cats in the university town Uppsala, Sweden have obtained. Peter is visited by his American relative Pelle Swanson who invites him to visit his new home country America - in the movie called Americat. There everything is bigger and everything seems possible.