It's possible to use 'magic' as a verb. It's rather informal, though. Children tend to use it, and adults in a semi-joking manner.

If you 'magic something away' for example, you make it disappear as if by magic. This is a not uncommon informal expression.

As for the letter 'k' - no, you don't add one.  You need to introduce a 'k' to make the 'c' hard, but only before an 'i' or an 'e'.  It's the same rule as for more usual verbs such as 'panic' or 'mimic'.

Panic and panics, but 'panicking' and 'panicked'.

Mimic and mimics, but 'mimicking' and 'mimicked'.

'She panicks' and 'She mimicks' is obviously wrong, as so is 'She magicks'.

In an informal recounting of a fairy tale, 'She magics everything back to normal' sounds fine to me. Remember that English is a very flexible language when it comes to parts of speech.

Right, I agree with your friend. Magic is a noun, so you need another verb to complete the sentence: do magic, perform magic, etc...

I've listened to the clip, DavidM, and it doesn't sound odd at all in the context.  It's a child speaking, in a fantasy story for children, so it seems to me quite natural for the cartoon kiddy to say 'I know, I'll magic him out of the mud!'

It's interesting that your answers of 'Yes, it's weird' versus 'No, it's OK' are split 50/50 between speakers of American English (US, Canada) and British English (UK, Australia). This, together with the fact that it's a British video, might suggest a regional difference in the acceptability of the use.

Sorry Su.Ki., my fault. The information shown in brackets are the place and the year of birth of the author. I thought they were relevant data.

Thanks again to all of you

It's interesting that all your American examples are fairly old (1950s - 1970s).  In the past, written American English was more 'British' than it is today.

As for the 'k' question: Anyone who thinks that 'magic' as a verb is always written with a 'k' should check out the basic spelling rules of English verbs ending with 'ic'. Here are the commonest ones:

panic

mimic

traffic

picnic

frolic

All of these verbs have an 'ic' in the infinitive form and in the third person 's' form - panics, mimics, traffics and so on.  The 'k' is only added to prevent the softening of the hard 'c' into a an 's' sound. For example, we write 'mimicked' rather than 'mimiced', because 'mimiced' could be pronounced 'mim - iced' /aist/.  This is the same rule that applies in many European languages - the 'c' is softened before 'i' and 'e', unless an intervening letter prevents this.

'Magic' as a verb follows the same rules:

He magics it away

He will magic it away

He is magicking it away

He has magicked it away

By the way, even American dictionaries such as the Merriam Webster list 'magic' as a verb.