Wow Amy,
That's pretty young for volleyball. You'll need to make some adjustments and use some lead-up games. I suggest that you use a much lighter and smaller ball and a smaller court with a much lower net if possible. An appropriate lead-up game is volleytennis. Lower the net to the ground and allow the ball to bounce once after each play. The skills are all the same as in regular volleyball. Gradually raise the net as their skills progress.
There are so many possible drills available that I suggest you search some volleyball websites and buy a volleyball training book from your local bookstore. Good luck coach!

Jack, I'm going to disagree with you here. Our biddy league is for 4th and 5th graders, but we are trying to get a younger league because of the demand. I have helped run clinics for 2nd and 3rd graders, and they are quite responsive to learning the skills. I do agree a lighter ball should be used like the volley-lite, something with a soft covering, and the net should be lowered. We lowered the net for our biddys to 6'10", but I think moving down to 5' 6" for 2nd and 3rd grade would be good. If this can't be done that's ok as I have seen the kids work with regular nets just fine. I don't think the court needs to be any smaller as they will probably crowd together anyway, plus this is a difficult task to get approvals for making adjustments to a floor.

Amy, you don't give any details of your team or league, so I am going to assume it is real volleyball on a regular court, with some adjustments to prevent a good server from serving out and rotation rules to get all the kids on the floor.
Now the drills. The basics at this level are just that. Concentrate on bump passing, setting and serving. If they pick this up quickly you can try showing them how to hit but most will just be bumping the ball over the net, because a proper rollover hit will be tough with their height if the net is normal height.
Start with the bump pass. This is the most underdrilled skill and is still done wrong by many players even at high school level. Teach this skill thoroughly. Especially how to use their knees to lift and not swing their arms. They won't get this right away but drill it into them anyway. Next teach them how to serve. I'm guessing they can serve from close to the net so that they can get it over the net. Then teach them how to use 3 hits, one of the most important concepts for young players to get, and too often it is not coached until high school. Teach them young. For the passes I use straight forward partner toss and bump. Have a partner toss the ball up in the air and a player bump it back to her/him. The balls will go all over so spread them out, and start them close together with small tosses and bumps, then let them slowly move apart. For setting, teach them how to make the triangle, I tell them to shape their hands to pick up a 2 litre bottle to drink out of it, and then have them push the ball up using their knees and elbows together. If you want to teach overhand serve at this level then God bless you, but I think that just showing them how to hit the ball out of their hand and over the net should suffice as the most coaching should be done on the bump pass and 3 hits. I would throw little games in between the drills to keep them from getting bored. Try having them hit you in the head with a serve, just stand an appropriate distance away. For setting have them stand under a basketball basket about 3 feet back and set the ball into the basket. This can be a game with points for hitting the backboard, rim, and getting a basket. Another is nukem. Coaches apply their own rules in this game, but it is basically volleyball with catches and throws instead of hits. Set them up on the court like a normal game. Throw the ball over the net and a player has to catch it. Then they should throw it to another player closer to the net, and then another one. The third player should throw it over the net. If the ball hits the floor it's a point. This game will teach them to use their teammates and 3 hits. When they are good enough from the passing drills and serving practice, this game can transition easily to regular volleyball, substituting bumps and hits for the catches and throws. Whatever you do don't let them get idle kids at this age need to be kept moving. Use as much help as you can get to get them herded and keep the drills moving. High School players are good for this when you can get them.

Have fun

I like to focus on Form over Function. So, for my 2nd and 3rd grade girls team, I do a version of "Pepper" where 2 partners are about 10-15 feet apart and then "Serve > Bump > Bump > Pass".

They can do this with their friends, family, etc...

The idea is total control. They should not have to chase the ball. It has proven to be difficult but not impossible for this age group. It's one of those "ah-ha" drills. When they finally do it without having to chase the ball, they jump and squeal just like little girls do.

Also, it's a great pregame and pre-practice starter. There is never a "stand around" moment with me. If there were a possible moment for standing around, I have them partner up and Pepper.

I have some other drill ideas in my Facebook Notes.

Another great drill is what I like to call, One Bounce Popcorn. I have all the girls make a large circle. Then they bump the ball around. The rule is the ball HAS to bounce at least once. This gives the girls time to position themselves in front of the ball so they are moving thier bodies instead of just reaching and swinging with their arms.

um,
i'm not a coach but one basic drill is the grape vine. the garpe vine is when you put your feet together andput your right foot on the outside of your left foot
and so on.