I read this book to DS some years ago and I remember it being weird but for the life of me I can't remember the name. This is all I remember:
There is an older sister and a younger brother and the book starts with them walking home from school and meeting a dwarf-like creature on the way. He has a magical book with him that I think he has stolen and it gets stuck to the little boy's hand I think. Some kind of evil person (a witch possibly) is looking for the book and they go to their school librarian for help who turns out to be a magical creature. And there's something about the witch taking over everyone's dreams if she gets the book. The title of the book contains the dwarf's name I think and it's something odd/funny like Stumblebum. The story had a Scandinavian feel to it but I could be totally off about that.
Help!