Meggie talks to the tin soldier before going to bed; she feels badly that he's in their world now, even though in his own story, he gets melted down.
Then Fenoglio wakes up Meggie in the middle of the night, and he has her read what he's written as an experiment. He's written a new end to the tin soldier's story, and this time it's a happy one.
Meggie reads the new ending aloud, and the tin soldier disappears. Now they have confirmation that stories can be changed, and Fenoglio hopes they can write a new version of the Shadow that won't act like a killing machine for Capricorn. We do too.