WILHELM HAUFF was a story-teller in the great European mythic tradition. His short stories, peopled with a vivid assortment of dwarves, evil witches, enchanted swans, and devious princes, owe a clear debt to the Brothers Grimm. But rather than rehashing old tales, Hauff created a realm far more exotic than the Grimm's Black Forest, a place where the morals are less than clear-cut and where characters must rely on wits as much as magic spells to solve their predicaments. One collection (probably his best known volume), Little Mook, provides the two tales for our new Pocket Paragon: "The History of Little Mook" and "Longnose the Dwarf." "Little Mook" features a gnomish, innocent orphan whose parents never thought he would amount to much and refused him even the most basic education. Friendless and alone, the naive Little Mook is stripped of his inheritance, cast out into a hostile world. Blessed with an enterprising nature and outfitted with a pair of magic slippers, he still manages to outwit a cabal of treacherous courtiers and make his fortune. "Longnose the Dwarf" stars a clever little boy enslaved by a cruel witch's curse. Freed from servitude but transformed into a hideous dwarf with a huge proboscis, he returns to parents who no longer recognize him. Luckily his culinary skills put him in good standing with the local Duke, and his good nature and generous heart restore him (with a little help from some magic herbs and an enchanted goose) to his family. Both stories are decorated with the glowing, gemlike tempera paintings of Boris Pak, a Russian artist whose ornate, whimsical style perfectly captures the romance and humor of these two extraordinary fables. His paintings, smuggledout of Communist Russia, are the first of his works to be published in the U.S. and they're reproduced here in glorious color.