A poor shoemaker and his wife have only a stale donut and a cup of coffee left to share. An elf drops by, and they offer to share with him. He teaches them (in song) to dunk the donut in the coffee. Later, as they sleep, he brings several other elves back, and they work through the night making shoes in humorous ways. The shoes are a success. Soon, the shoemaker and his wife are quite prosperous. They treat the elves to a feast of donuts and coffee, and the elves treat us to another chorus of "Dunk! Dunk! Dunk!".
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