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Starts with Barbie and her little sister Kelly practising some of the ballet steps from the Nutcracker ballet. Kelly is feeling a bit depressed because she can't seem to master the steps like Barbie, so Barbie decides to cheer her up by telling her the story of Clara from the ballet (that I guess they saw, so that means since Barbie knows Clara that make her Barbie's friend). The story begins when Clara is given a wooden nutcracker as a Christmas present by her Aunt Elizabeth, but it is soon broken by her high-spirited younger brother Tommy. The story of Barbie and Kelly jumps into the story of Clara but we then enter the fantasy land of Clara's dream. In Clara's dream, mice emerge from the mouse hole in the wall, at night while Clara is sleeping and start fighting over food. The broken wooden nutcracker comes to life and starts fighting with the mice and of course the Mouse King . Clara wakes up and comes to the Nutcracker's rescue, but the Mouse King uses his magical powers to shrink Clara down to the same size as the Nutcracker and the mice. Apparently, only the Sugarplum Princess can restore Clara back to her normal size, so the Nutcracker enters through the mouse hole where it leads to a magical kingdom where the Mouse King rules. They land in the Ice Cave where the Snow Fairies help them escape.
As their journey continues Nutcracker and Clara visit the GingerBread Village where they find two children left behind along with Marzipan the horse. When they come across the Mouse King's army they fled into the forest where they meet two "old" friends of Prince Eric and other villagers who suspect them of being the Mouse King's spies and kidnappers because they had the two children with them. Later at night Clara finds the Nutcracker all alone outside, she know his secret , that he's the Prince. He tells her that that he's despreate to find the SugarPlum princess so she can restore his people's happiness (which I doubt she can, only he can do that!).
Meanwhile the Mouse King's finds out from Pimm (the bat) that Clara and her friends are trying to find the SugarPlum princess to defeat the Mouse King. Of course this makes the Mouse King upset and makes a Rock Giant, (yes a Rock Giant, typical) to go squish the Nutcracker into splinters, until he's defeated and falls through the ice and sent to the bottom of the sea. Once the Mouse King finds out about it he figures out that if the Nutcracker believes that the Princess exisits although the Mouse thinks it's a myth than that's what he'll get only with no happy ending (oh sounds scary).Once they find the island they find the "castle" that they're looking for. Unfortunatly it's a trap but Clara is the only one that doesn't get caught, my guess is she knew it was a trap, either that or she was thinking about home too much if you noticed.
Later she frees everyone, the Nutcracker fights the Mouse, the Mouse loses because he used his own magic against him, Clara's kiss breaks the Prince's course and she turns into the SugarPlum Princess. And the dance begins. After Clara and Eric's dance is done they share a kiss, awww how sweet! But the dream ends thanks to the mouse, he snagged her locket and opened it. (Apparently he "despises" happy endings-which means he hates them) Once she finds her-self back in the parlor she meets Eric again, thanks to her Aunt Elizabeth!!Yay!! After Her Grandfather and her Aunt leave the room, dragging Tommy out too, (who's really impatient to open preasents-a classic thing for children at Christmas time) so Clara and Eric can have some time alone, to dance. Anyway who knows what happens from there because we return back to where we started. Kelly's finally convince that she can do the Dance of the SugarPlum Fairies thanks to Barbie's story and she did!!
