Go to the fantasyland courtyard and enter either Peter Pan or the Alice in Wonderland ride. When you are finished riding you "may" get a sword in the stone magic pin. If you don't ride again until you do.
You can use that magic pin over the by the sword in the stone, which is located in the fantasyland courtyard at the top of the screen. If you are lucky, you will pull out the sword and win a prize. The prize is currently a "I'ts a small world" pin (a new pin, not the previous pin).