Like many fairy tales, this handsome family film concerns a child coming to terms with his fears and the death of a parent. In 1942 a Scottish harbor village becomes an outpost for the British campaign against Nazi submarines, and a fatherless boy (Alex Etel of Millions) finds a large seashell that releases a mythical water horse. Computer designed by New Zealand's Weta Workshop, the cuddly, mischievous creature looks like a baby seal crossed with a turtle until it grows to the size of a dragon, as lethal as any U-boat. Director Jay Russell (My Dog Skip) grounds the fantasy in serious drama, with enough slapstick to keep it from getting too scary for tots. With Emily Watson, Ben Chaplin, and Brian Cox. PG, 105 min.