The Stahlbaum house is aflutter with preparations for their annual holiday party. While Clara and her brother Fritz anxiously await the arrival of the guests, Uncle Drosselmeyer can be seen in his workshop putting the finishing touches on his unique toys. The party finally begins with plenty of food, presents, dancing, and fun! The beloved Uncle Drosselmeyer arrives late with a cloak full of magic and amazes the guests with two life size dancing dolls. He then presents Clara with a magnificent nutcracker. The gift sparks sibling rivalry, and the nutcracker is broken. Drosselmeyer wraps the toy with a silk and promises a complete repair later. Clara and Fritz rejoin their friends for the remainder of the party, ending the evening in a festive gavotte with parents and children alike.
After the guests have left, and the family has gone to bed, Clara sneaks downstairs to see if her nutcracker has been repaired. Exhausted from the party, she curls up on the day bed with her nutcracker and begins to dream.
With the stroke of midnight, mice rule the Stahlbaum's home. They chase Clara and her nutcracker until Drosselmeyer appears. He scatters the mice briefly, magically repairs the nutcracker, and brings her toys to life. The mice return and a battle ensues between the mice and the toy soldiers, who are lead by Clara's nutcracker. The dreaded Diva Mouse Queen joins the battle and all looks lost for the Nutcracker. In desperation, Clara throws her shoe, striking the Mouse Queen, which distracts her long enough for the Nutcracker to strike. The Queen is vanquished, but Clara and her Nutcracker collapse from the stress of the battle. The Snow Fairy appears and calls on her entourage to revive the couple and treat them to a beautiful journey through the Land of the Snow.
Clara and her Nutcracker prince arrive in the Land of the Sweets ruled by the beautiful Sugar Plum Fairy and her Cavalier, where angels and guests from around the world greet them. The Sugar Plum Fairy gives Clara a crown, and she and her Prince are escorted to their throne, where they are given sweets to enjoy. They are entertained with a feisty Spanish dance, a sultry Arabian dance, a spritely Chinese dance, an exciting Russian dance, a Shepardess with her little lambs, Mother Ginger and her Polichinelles, and a sumptuous Waltz of the Flowers. The Sugar Plum Fairy and her Cavalier dance an elegant Pas de Deux as their final gift to the young couple. Clara is overwhelmed with joy and thanks the Sugar Plum Fairy and her Nutcracker Prince, only to see the guests disappearing! She swirls around in confusion, and dazed, realizes that she is in her own living room. She finds her Nutcracker under the tree, and lovingly holds it, wondering if her adventure was real or just a dream…
A few nights later, Hilarion visits Giselle’s grave, only to be captured by the legendary Wilis. Wilis are the spirits of women who have been abandoned by men who had promised to marry them. Every night, they rise from their graves to seek revenge by forcing any man they can find to dance until he dies of exhaustion. Myrtha, the Queen of the Wilis summons Giselle’s spirit and commands her to dance as a new Wili. The Wilis hear Albrecht and hide as he dances with Giselle’s spirit. The Wilis capture Albrecht, and Myrtha commands him to dance. Knowing that a Wili never tires, Giselle begs to dance instead. She dances alone and with Albrecht, but Myrtha and the Wilis are too strong, and Albrecht must dance. Just as he can dance no more, the sun starts to rise. The Wilis disappear, and Albrecht has survived the night. The power of Giselle and Albrecht’s love for each other has saved Albrecht from a terrible fate.