The Magic is Believing is the third episode of the second season.
A magician comes to Shining Time Station and tries to show the kids a magic trick, but he messes up because he is afraid that his audience will laugh at him. The magician thinks that his magic has been lost, but Stacy reassures him by saying that he'll get it back soon. When Mr. Conductor appears, Becky thinks that he is a toy. Mr. Conductor and the kids explain everything and the magician gets his magic back.
- Mr. Conductor
- Stacy Jones
- Billy Twofeathers
- Dan Jones
- Kara Cupper
- Jake Scoop
- Kevin Knowls
- Lily Conductor (mentioned)
- Edward (mentioned)
Jukebox Band Segment Song
- Nine Hundred Miles
- This is the first time Becky is introduced to Mr. Conductor.
- Another member of the Conductor Family is named in this episode: Mr. Conductor's Aunt Lily.
- This is the first appearance of newspaper reporter Jake Scoop, who writes for the main news source in the show, The Indian Valley Gazette.
- In this version of Old Iron, when James begins to go fast, the audio echoes.