The mice retreat and the nutcracker is transformed into a handsome Prince. He leads Clara through the moonlit night to a pine forest in which the snowflakes dance around them, beckoning them on to his kingdom as the first act ends.
In honor of the young heroine, a celebration of dolls from around the world is produced: Spain, India, China, Russia and France. All dance for their amusement; a string of beautiful flowers perform a waltz. To conclude the night, Clara and her Prince perform a dance.
Clara wakes up from her dream, the Nutcracker is just a toy again.