Plot

A magician's nephew is turned into a Nutcracker by the Mouse Queen. The Nutcracker fights the Mouse King and breaks the spell when the girl shows compassion. They journey to the Land of Sweets, where they are honored.

Drosselmeyer, a timeless magician and creator of mechanical toys and clocks, was once employed in a royal palace where he invented a trap that killed off half the mouse population. In revenge the wicked Queen of the Mice cast a spell over Drosselmeyer's nephew, Hans-Peter, which transformed him into an ugly Nutcracker Doll. The only way to break the spell was for the Nutcracker to defeat the Mouse King, thereby committing an act of great bravery, and for a young girl to love and care for him in spite of his awful appearance.

When Drosselmeyer is invited to entertain the guests at a Christmas party that his friends, the Stahlbaums, are giving, he decides that this could well be the opportunity he has been looking for.

Their daughter, Clara, is a little younger than Hans-Peter imprisoned in the Nutcracker, and what better time than Christmas, when the mice are busy stealing the leftovers, for a confrontation between the Mouse King and the Nutcracker? He decides to put the Nutcracker in the tender care of Clara and makes a special Christmas Angel to guide her through her task.

When all the guests have departed and the house is asleep, Clara, in search of the Nutcracker, creeps downstairs and discovers Drosselmeyer waiting for her. He draws her into his own special world of fantasy where time is suspended, and exerts all his powers to transform the living room into a great battlefield and summons the Mouse King. In the ensuing fight between the mice and the toy soldiers the Nutcracker defeats the Mouse King, but only through the intervention of Clara, who, out of compassion, saves the Nutcracker's life. Transformed into his real self, he dances with Clara and they find themselves in the Land of Snow. Drosselmeyer then sends them on a magic journey to the Sugar Garden in the Kingdom of Sweets where they meet the Sugar Plum Fairy and her Prince.

Freed at last from his imprisonment inside the Nutcracker, Hans-Peter recounts to the Sugar Plum Fairy his great adventure and how Clara saved his life. They then join in a magnificent entertainment put on by Drosselmeyer to honour them for their bravery.

Returning to reality, Clara runs out into the street in search of Drosselmeyer and encounters a strangely familiar young man, while back in his workshop Drosselmeyer prays that his efforts will be rewarded. His nephew returns; the spell has indeed been broken.