Herr Stahlbaum and his wife are giving a Christmas party. Clara and Fritz, their children, greet the guests. All the children are given toys by their parents. Suddenly, the mysterious Dr Drosselmeyer arrives and entertains the children with his magical tricks and wind-up dolls.
Dr. Drosselmeyer brings a special gift for Clara, a wooden Nutcracker. In a jealous fit, Fritz breaks it, but Dr Drosselmeyer quickly repairs the Nutcracker. The party ends, the guests leave and the Stahlbaums retire for the night.
Clara awakens, the clock strikes midnight and the room fills with giant mice which attack her! Life-sized toy soldiers, led by the valiant Nutcracker, come to her rescue. The King Rat attacks the Nutcracker, but Clara hits him with her shoe and the Nutcracker wins the battle.
After the battle, the Nutcracker turns into a handsome prince. The Nutcracker Prince transforms the Stahlbaum’s house into the Land of Snow. The Snow Queen and the Snow Prince dance with the Snowflakes. Clara and the Nutcracker Prince depart for the Kingdom of Sweets in a beautiful, enchanted sleigh.
Clara and the Nutcracker Prince continue their journey across the Lemonade Sea. When they arrive in the Kingdom of Sweets, the cooks are preparing delectable treats for their enjoyment and they are greeted by the Sugar Plum Fairy. In Clara’s honour, the Sugar Plum Fairy arranges for the inhabitants of her kingdom to entertain them while they eat by performing a Spanish dance, an Arabian dance and a Chinese dance. Clara is also entertained by the Dance of the Mirlitons, a dance with Mother Ginger and her children, a Russian dance and the Waltz of the Flowers. Then, the Sugar Plum Fairy and the Nutcracker Prince dance a grand pas de deux.
As the celebration draws to a close, Clara drifts off to sleep. She awakens from her dreams as the Nutcracker salutes his Princess Clara.