In front of Councillor von Stahlbaum’s house.
It is Christmas Eve and Councillor von Stahlbaum is giving a party for his children, Clara and Fritz, and their friends. Among the guests is Clara’s godfather, Doctor Drosselmeyer, who is said to have magical powers. He gives Clara a nutcracker as a present. Clara also receives a pair of magical shoes from her grandparents. Jealous, Fritz breaks his sister’s nutcracker, which is hastily repaired by Doctor Drosselmeyer. Everybody dances around the Christmas tree and the nutcracker, and the evening ends on a happy note. When the party is over and everyone has gone to sleep, Clara goes downstairs to the living room and falls asleep with the nutcracker. Mice and rats invade the room and engage in a battle against tin soldiers. Suddenly, Clara is overpowered by the rodents but the Nutcracker, brought to life by Doctor Drosselmeyer, comes to her rescue.
The Nutcracker is almost killed by the King of the Rats in the ensuing duel but Clara ends the battle when she throws her magic shoe at the King of the Rats and hits him on the head. As a reward for Clara’s courage, Doctor Drosselmeyer transforms the Nutcracker into a handsome Prince, who takes Clara to the Land of Snow. There, she dances with the Snowflakes, and the Prince then takes her to visit the Kingdom of Sweets.
In this magical kingdom, the Sugar Plum Fairy and Cotton Candy Angels dance while awaiting the couple's arrival. Clara and the Prince are greeted by the King of Sweets, who holds a large sugar cane in his hand. The Prince tells everyone how Clara saved his life.
A big party is held in her honour. The Sugar Plum Fairy and her Prince perform a dance to welcome them, and the three Chefs from the sweet kitchen arrive as well. The Prince recounts to the King of Sweets and to the whole court how Clara saved his life by throwing her shoe at the Rat King's head. After the telling of this great tale, a celebration is held in Clara’s honor.
The three Chefs bring out their finest cakes for Clara and the Prince, who attend a series of fabulous themed dances: Chocolate from Spain, Coffee from Arabia, Tea from China, Trepak from Russia, and more! Then follow the dance of the Dewdrops, that of the Shepherd and his Sheep, and the great Waltz of the Flowers. Clara, proudly seated next to the Prince, is dazzled! The Sugar Plum Fairy herself takes a big pas de deux with her Prince and all join them to dance one last time for their special guests.
Unfortunately, the party has to come to an end. The Sugar Plum Fairy picks up Clara to remind her that it's time to go home. Clara bids farewell to the King of Sweets, the Sugar Plum Fairy and the Prince who brought her to this beautiful land. Clara sets off in a large coach pulled by swans. On Christmas morning, she wakes up in her bed, her Nutcracker snuggled in her arms. She returns to a world where magic is not always visible on first glance, and you must keep your eyes open to see it... She will never forget that wonderful night!