The main story is about a young orphan girl named Lyra Belacqua, played by Dakota Blue Rcihards, who lives in a alternate universe, much like England in its Victorian years. Raised by scholars at Jordan College, Lyra has an uncle, Lord Asriel (Daniel Craig), who is an arctic explorer and claims he has found "Dust".

The Dust is elemental component that flows between each parallel world and into adults through their daemons. The daemons, pronounced demons, are little creatures that are bonded with each man, woman or child. Children’s daemons are changeable until they reach maturity when the little creatures will shape into an animal, who reflects the moral character of its owner. For example, Lord Asriel’s daemon is a snow leopard while Pantalaimon (voice of Freddie Highmore), Lyra’s changing daemon can be a hawk, a rodent, a fox, a cat or whatever she likes.