Doll collector Nathan Dolly (who had once battled Iron Man as Mister Doll) acquired two 12-inch wooden figures from a doll maker on Wundagore Mountain, a mountain in the Balkans of Central Europe where the Earthly essence of the demon Chthon was imprisoned. Chthon had infused the entire mountain and all that was on it with his mystical might. As such, the wood from the dolls had been carved possessed magical potential. The doll maker showed Dolly how he could animate the figures by projecting his life essence (astral form) into it. Nathan Dolly made the fatal error of trying to animate both dolls at once, and in succeeding to do so, left his human body lifeless. His consciousness trapped in the twin figures, Dolly managed to mail himself to his wife Priscilla in America. There, Dolly researched the occult until he discovered a way to transfer his life essence from the dolls to full-sized mannequins.
The mannequins, whom he named the Brothers Grimm, possessed certain power of prestidigitation, such as the conjuring of lethal substance in the form of novelty items. Dolly used his two surrogate bodies to commit crimes and acts of mayhem. Eventually Dolly desired to possess a real human body rather than exceedingly life-like mannequins. With his wife's help, Nathan Dolly coerced the sorcerer Magnus into performing a magical rite of transference for him. However, at the last minute, Magnus prevented Dolly's spirit from taking possession of the human body he sought to inhabit, and blocked his spirit's return to the mannequins. Consequently, Nathan Dolly's life essence had nowhere to go, and presumably passed from the Earthly plane.
Months later, two brothers acquired the run-down theater where the magical ceremony had taken place. Discovering the full-sized mannequins of the Brothers Grimm, Percy and Barton Grimes felt compelled to try on the Brother Grimm costumes. In doing so, they discovered they possessed the same powers of prestidigitation as the original Brothers Grimm mannequins. They used these powers to take revenge on a business rival, and were opposed by Iron Man II. Percy and Barton Grimes were taken into police custody for their crimes and are currently out on bail. It is not yet known how they gained the powers of the Brothers Grimm: whether Nathan Dolly's abilities were conferred upon the costumes at his demise, or whether Dolly's life essence in some way possesses the costumes.
The Brothers Grimm possess the magical ability to conjure, seemingly from somewhere in their costumes, a variety of novelty items with special offensive capabilities. The objects appear as if by sleight of hand, and seem to be limited to a size that can be held with one hand. Apparently, the Brothers can conjure whatever novelty item they can imagine. The limit to the number of items they can conjure in rapid succession is not yet known. Among the items they have produced are long strands of nearly unbreakable golden thread, corrosive-filled eggs, pies filled with blackbirds, paralytic "stardust," and amazingly fast-growing bean seeds.