The production of charm quarks is studied in deep-inelastic electron-photon scattering using data recorded by the OPAL detector at LEP at nominal e$^+$e$^-$ centre-of-mass energies from 183 to 209 GeV. The charm quarks have been identified by full reconstruction of charged D$^*$ mesons using their decays into D$^0\pi$ with the D$^0$ observed in two decay modes with charged particle final states, K$\pi$ and K$\pi\pi\pi$. The inclusive cross-section for charged D$^*$ production in the reaction e$^+$e$^- \rightarrow \mathrm e^+\mathrm e^- \mathrm D^* X$ is determined in the region $0.0014 < x < 0.87$ and $5 < Q^2 < 100$~GeV$^2$. For $x > 0.1$ the perturbative QCD calculation at next-to-leading order perfectly agrees with the measured cross section. For $x < 0.1$ the measured cross section is $43.8 \pm 14.3 \pm 6.3 \pm 2.8$~pb with a next-to-leading order prediction of $17.0~^{+2.9}_{-2.3}$~pb.