The Tree is an old gnarled tree high up in the mountains, where the magic has mutated, causing it to be really cold and causing the tree to talk. He has been sprayed with a pink splodge by the woodcutter, who is going to come back and cut him down.
When Simon meets him he agrees to remove the pink splodge in exchange for some magic words which the Tree has overheard. The words turn out to be 'Alakazam', 'Hocus Pocus', 'Abracadabra', and 'Sausages'. Afterwards Simon refuses to talk to the tree, as he feels he has been conned.