The Colonel and his wife are giving a party on Christmas Eve for their two children, Clara and Fritz. Friends and family arrive at the house including the children’s uncle and their eccentric old aunts, Angelina and Caterina. Soon the room is filled with delighted faces as the Christmas tree is revealed and the children receive their presents.
However, the mood is suddenly transformed with the arrival of a mysterious magician, Drosselmeyer. With him are three entertainers that have come to the party to perform for the children. Drosselmeyer has brought Clara a very special Christmas present: a strange nutcracker in the shape of a handsome Prince, which Clara immediately adores. Excitedly, the children dance round the room with their new toys, but Fritz breaks Clara’s nutcracker. An uncle quickly mends it and Clara wipes away her tears.
After the party, the servants dim the lights and put out the candles on the Christmas tree, plunging the room into an eerie darkness.