The characters in Lucy Wood's debut collection of short stories, "Diving Belles," have typical problems. In the titular story, the main character, Iris, misses her husband. Characters worry about getting older, complain about their jobs, or delay unpacking boxes of old stuff.

However, the way these problems work themselves out is always ... unusual. Or rather: mythological. The human problem at the heart of the story combines with a creature from the world of folklore.

In "Diving Belles," Iris rents a contraption that will enable her to descend in the sea; her husband disappeared with the mer-people long ago, and she's finally resolved to go after him.

A matter-of-factness about the folklore element characterizes almost all the stories. In "Countless Stones," Rita tries to help her ex-boyfriend run some errands -- before she turns completely into stone.

That's the format for each story: a straightforward narrative with all the trappings of daily life in contemporary England (the characters make tea, worry about their cars starting, visit their elderly parents, complain about tourists) is spliced with elements of another, fairytale reality.

A well-known American practitioner of a similar form is Aimee Bender. In story collections like "The Girl in the Flammable Skirt," she epitomizes what's become an emerging new short-story genre: splicing the conventional short story and the bizarre. Often the bizarre element is an uneasy metaphor for a problem in contemporary life.

What sets British writer Wood apart from the hordes of young writers who've adopted this approach is how grounded the magical element is in the reality of her stories. The magical creatures in her tales -- the mer-people, or the little green men, or the ghosts -- do not come as a surprise to the characters, who've heard tales of these creatures their whole lives.

In "Of Mothers and Little People," when the narrator discovers that her mother is in love with a "little green man," she immediately recalls stories from her childhood: "There was always that story you didn't really listen to ... about her disappearing for months and coming back like nothing had happened."

The magic is always embedded, not only in familiar stories from folklore, but in the personal myths of the characters' lives. Thus, there is a quiet realism to even the most extraordinary events.

Wood grew up in Cornwall, and some of the stories have a Cornish flavor, such as "Some Drolls Are Like ... ," which draws on the Cornish tradition of "droll-tellers" or wandering storytellers. Wood's droll-teller is hundreds of years old and bemused by the changes he sees around him: "The shops had changed. ... No more blacksmiths. No more video shop."

This combination of subtle humor and everyday magic makes "Diving Belles" an engaging collection of contemporary folklore.

Laura C.J. Owen is a writer in Tucson, Ariz.