Derek McCormack wants to pull back the curtain and show us the magician preparing his tricks. His prose is a merciless betrayer, peeling back the petty dreams and desperate desires of his catalogue of characters until we realize that knowing everything is something like knowing nothing.

"The title Wish Book [his new collection of interconnected short stories] refers to this time when people were either trying to buy happiness or sell it. Everyone loses out in the end. It's just a bad deal all the way around," dead-pans the 30-year-old McCormack about his very funny and very dark book.

In the opening gambit, The Joker, squirting flowers, dribble glasses and exploding cigars segue into knock-out drops and an abduction -- a boy is stripped and shaved down: "I gather the hair," the Joker tells us, "cut it up fine. Funnel it into packets. Itching powder."

In The Chuck-Shooter, a starving man posts a sign for his "attraction": "Varmit Village. 50 cents." He sets off into the woods in a desperate search for critters, and ends up in a bog, "up to my arm-pits, grasping at moss. Screaming like a pie bird." It's a theme that runs all through Wish Book: a catalogue of possibilities presented to the reader as a mail-order invitation; a hallucination that looks like the real thing.

"Mostly the stories start off with me wanting to write about how carnival games work, or how itching powder is made," says McCormack. "They are obsessions I've turned into narratives."

McCormack's primary obsession is Peterborough, Ont., circa 1930. This is the set of Wish Book. But don't be fooled: This not the jovial tale of small-town Canada adorned by the whimsical sarcasm of a Leacock, say. This mythical Peterborough is brilliantly, but horribly, imagined for us by McCormack. It's a place where homicidal hobos lurk in the ditches, and the opulence of Turnbull's department store casts a blinding glare over Main Street. In the sidewalk shadows, the inventor of the Home Embalming Kit waits for the chance to try out his new technique.

"When I grew up in Peterborough," the Toronto-based McCormack explains, "I just thought it was a boring little town. But now that I'm writing about it, I think about it as a set, and when I go back it's been transformed: I find it much more mysterious than it actually is."

In the same way that Andre Alexis re-imagined the capital in his debut short-story collection, Despair and Other Stories from Ottawa, McCormack shapes a fabricated past that says as much about present-day obsessions and delusions. Wish Book is incisive, honed to a sharp point; a bleak pin-prick perfection that punctures pat assumptions. In McCormack's strange hometown, nostalgia is no cliche but a compelling re-imagination of present day terrors: Poverty and serial killers plague this past Peterborough, and like modern-day marketeers, hucksters, rubes and pitchmen sell you powders that offer false hope and that do more harm then good.

And like postmodern life, the stories connect in ways that show us just how empty the store really is, and how complete and total our desolation can be when all our relationships become reduced to financial transactions.

The people who populate this Peterborough are comic archetypes -- the nurse, the showman, the magician -- brought to life by McCormack's meticulous, insurgent and voluminous capacity for self-deprecation.

"Basically all the characters in the book are me, in a way, and they aren't me because they keep running into each other and intersecting. It's clearly me attracted to some element of the past and sticking myself into it. I chose the '30s because it seemed like a desolate time when everyone was trying to patent an invention, it was a time that was focused on discovery and improving your home, and the idea of the travelling salesman with all that glamour and the sexual threat of the stranger coming to town. But," warns McCormack wryly, "I've never been much of a stickler for historical accuracy."

McCormack is ambivalent about owning up to his own presence in the lives of his seemingly typecast characters, for this is an angry, compressed and bitterly hilarious book where outcasts, freaks, carnies and clerks populate the nooks and crannies of the muffled provincial burg.

Much of the book concerns itself with salespeople and department stores; as a teenager, McCormack worked in his parents' Peterborough store and, for years now, the mild-mannered McCormack has been a fixture behind the cash at a Toronto bookstore. In Wish Book, the glitz of merchandise contrasts with the back-room machinations of desperate employees: A cancer-ridden sales clerk gets promoted to display director and sets up a lavish front window -- when the lights go off the paint glows in the dark revealing "luminous limbs, skulls. Egg-shaped tumours glowing green between their ribs." In The Ghost, the hired window gazer takes a break from loudly ogling the displays to catch a glimpse of Bing Crosby trying on a suit. "A store detective grabbed my shoulder: 'You're fired.' Then: 'fairy.' "

In The Elf, a gay co-worker gives a repressed clerk handy tips on answering kiddies' letters to Santa Claus. The clerk, hopelessly in love with their bullying manager, gets his new friend fired. "Jesus," the manager proclaims. "How'd you know?" "He tried to make me go fairy too."

Unlike McCormack's first book, the acclaimed Dark Rides, also a series of interconnected stories set in a past Peterborough, the narrative here doesn't centre on the ordeals of a single gay, repressed character.

"There aren't a lot of openly gay characters in the book," McCormack says. "I wanted a time before people might have had some easy pop conception of themselves. I just wanted a blank slate."

In Wish Book, the metaphor of a forbidden sexuality applies to the entire population. No one is "normal," no one is immune -- or safe -- from the horrors of whispered wishes. "People don't have very wide horizons in my books. I think they were born in Bancroft, went to school in Apsley and they hit Peterborough and they were dazzled by the lights. And there's no over-arching narrative," McCormack insists. "It just starts off sort of innocent and then everyone dies."

In truth, few people actually meet their maker in this book. Each one of McCormack's stories ends with an ambiguous twist and a carefully articulated image: The incurable sicknesses that plague many of these characters; the X-rays resonating through bags of Halloween candy and sacks of flesh alike; the fake clairvoyants poaching the hope of families whose children have gone missing.

In such a world, what chance do the Newshawk, the Super Hero, and the Singing Brakeman have? Characters flail, and sink deeper into the soft mush of our minds. Their fates, however suggestive, are left up to us. This isn't a flaw in the writing. We don't have to know what happens. McCormack's deft use of repeated metaphors demands that we reach our own conclusions. As a result, when the book is funny, as it often is, the jokes are at the expense of not just the characters, but also the readers.

"The humour comes from people's desperation," says McCormack. "Their blindness in these really terrible situations." He pauses, looks down at his chest as if he's seeing right through. "I don't know why it's funny."

So close your eyes. Blow out the candles. And don't forget to make a wish.

- Wish Book: A Catalogue of Stories, by Derek McCormack (170 pages, $15.95, Gutter Press)