On Christmas Eve, Clara's Sugar Plum Fairy doll comes to life and asks for help--she lost her wand while she was looking after the Nutcracker's kingdom and needs it back!
They search the land of snow and the land of sweets, but the wand is nowhere to be found. At last, they arrive at the land of Christmas, where they find the Nutcracker. He is using the wand to make a giant gingerbread house for the fairy, as a thank you for looking after his kingdom. The fairy swishes the wand and adds the final touches.
The next morning, Clara wakes to find that the dolls are small again, but there is a giant gingerbread house surrounded by treats on the table, with a thank you note from the Sugar Plum Fairy.