It’s Christmas at the Stahlbaum home! A huge tree and many presents fill the living room, and guests arrive to celebrate with the family. Clara’s godfather, the mysterious Herr Drosselmeier, brings magical toys to life to entertain the guests. He presents Clara with the best present of all—a life-sized Nutcracker! But Clara’s brother Fritz is jealous of her magnificent gift and breaks the Nutcracker! Clara is heart-broken and the guests leave, but Drosselmeier repairs the Nutcracker, and just in time...

Upset about her broken toy, Clara falls asleep by the Christmas tree. The evil Mouse Queen and her mice army sneak in to attack the Nutcracker. A battle ensues, and the Nutcracker is struck down, nearly defeated. But Clara awakes in time to save her Nutcracker by throwing her skate at the Mouse Queen. Clara and the Nutcracker win the battle!

Nutcracker takes Clara through the swirling snow, to the land of the Sugar Plum Fairy. The Sugar Plum Fairy herself presents a celebration for them, with entertainers from every nation! Clara and the Nutcracker enjoy the festivities of music and dancing. The Sugar Plum Fairy ends the celebration, and presents Clara with a bouquet of spring flowers in the midst of the cold winter.