Act I, Scene I: The Christmas Party
The Stahlbaum family is having their annual Christmas Eve party. The guests have arrived and are dancing and enjoying themselves. The children dance and are given gifts. Clara's mysterious godfather, Herr Drosselmeyer, makes his usual grand entrance. He arrives with mechanical dolls to surprise and entertain the guests. He has also brought Clara an unusual surprise, a Nutcracker doll.

Act I, Scene II: The Battle
After the party, when Clara thinks everyone else in the house is asleep, she creeps downstairs in search of her beloved Nutcracker. Drosselmeyer puts Clara under a spell to make her fall asleep and dream. In her dream, she imagines that everything in the room begins to grow bigger. Clara is then attacked by an army of mice led by the terrifying Mouse King and his henchmen. The Nutcracker leads an army of toy soldiers to defend Clara. The Nutcracker and the Mouse King fight a fierce duel, and Clara attacks the Mouse King herself. The Nutcracker then strikes the Mouse King with a final blow, ending the battle.

Act I, Scene III: The Magical Forest
After the battle, the Ice Princesses escort Clara into the Magical Forest where the Snowflakes welcome her and lead her through a snowstorm to the Kingdom of the Sweets.

Act II, Scene I: The Kingdom of Sweets
Angels welcome Clara to the Kingdom of Sweets. Royal Pages herald their entrance to the palace as they are welcomed by the sweets. Clara and Herr Drosselmeyer recount the terrifying battle between the Nutcracker and the Mouse King.

Act II, Scene II: Awakening
As the citizens of the Kingdom of the Sweets all joyfully dance together, Drosselmeyer comes to awaken Clara from her dream. He escorts her back through her dream and safely returns her to her home where she awakens.