In 1816 in Germany Clara's family are celebrating on Christmas Eve. Clara is jealous because her sister, Louise, has a boyfriend, leaving her feeling sad and wondering about growing up. She immediately cheers up when the eccentric Uncle Drosselmeier arrives at their home with special gifts: a fully automated toy castle for everyone, and a Nutcracker for Clara. Upon giving her the Nutcracker, Drosselmeier tells her a story about how the Nutcracker came to be the Prince of the Dolls.