The story of the Nutcracker is unusual in that so many people know it primarily as a ballet, accompanied by Tchaikovsky's excellent music and generally scattered with Christmas cheer. But the ballet is only half the story (quite literally). (In an interesting twist, it is actually based on an adaptation made by Alexandre Dumas -- the author of The Three Musketeers (the usual "if you haven't read it, what are you doing with your life" comment applies).) The original, however, was written by E. T. A. Hoffmann.

Hoffmann, incidentally, has a history of inspiring musical people. The most obvious example outside of The Nutcracker is that Offenbach wrote an absolutely brilliant opera based on the Tales of Hoffmann.

But returning to the novella at hand: You can read it here (though in English translation; he was inconsiderate enough to write it in German originally).

The story opens as Marie and Fritz Stahlbaum are waiting to see what gifts and clockwork toys will be brought them by the baby Jesus and their Godfather Drosselmeier, respectively. Drosselmeier arrives, looking rather sinister.

He was short and scrawny, his face was cowered with wrinkles, and he wore a big, black patch instead of a right eye. He also had no hair on his head, which is why he sported a very lovely periwig made of spun glass and very artistic.

Which he is -- he always makes them elaborate clockwork creations. There is no Santa Claus in this story; the children are told that it is the baby Jesus who brings the presents:

A bright shine grazed the wall, and now the children knew that the Christ Child had flown away on radiant clouds, flown to other happy children.

Which is a bit of a bizarre idea, but it was rather common at the time. And when you think about it, a fat man in a sleigh drawn by flying reindeer is not that much better. (I still want presents; this cynical streak is not a repudiation of gifts.) At any rate, this year Godfather Drosselmeier has outdone himself:

On a great lawn embellished with colorful flowers stood a fabulous castle with many pate-glass windows and golden turrets. A glockenspiel resounded, doors and windows opened, and you could see very tiny but dainty ladies and gentlemen in plumed hats and with long trains strolling through the chambers. The middle room had so many burning candles in silver chandeliers that it looked as if it were fully ablaze, and children in short vests and jerkins were dancing to the sound of the glockenspiel. A gentleman in an emerald cape often peered through the window, beckoned to the onlookers, and disappeared again -- just as Godfather Drosselmeier himself, but scarcely larger than Papa's thumb, at times stood below, at the castle gates, then stepped back inside.

The children, however, dismiss it because they have no use for toys that only repeat the same actions over and over, and which leave no room for variety or their own input. Drosselmeyer is understandably annoyed, considering the marvel that such a clockwork creation is; but he is eventually mollified by praise from the other adults.

It is at this point that Marie spots

an excellent little man, who stood there, quiet and modest, as if calmly awaiting his turn. Granted, there was a lot to object to in his stature; for aside from the fact that his somewhat lengthy and powerful upper body didn't quite fit in with the tiny, skinny legs, his head likewise seemed much too big.
To a great extent, amends were made by his attractive clothes, which suggested a man of taste and breeding.

As we all know, it does not matter what you look like, as long as you dress properly. The young man is revealed to be a Nutcracker. Marie, feeling instantly sympathetic towards him, gives him only the smallest nuts to crack, so that he will not have to open his mouth so wide; but then her hateful brother Fritz gets a hold of him:

Fritz kept shoving in the biggest and hardest nuts. All at once they heard a double crack. Then three little teeth fell out of the Nutcracker's mouth, and his whole lower jaw turned loose and wobbly.
"Oh, my poor, dear Nutcracker," Marie exclaimed, whisking him out of Fritz's hands.
"He's a stupid simpleminded guy!" said Fritz. "He wants to be a Nutcracker, but he has no decent teeth. He probably doesn't understand his own work. Hand him over, Marie! He has to chew up nuts for me, even if he loses his remaining teeth -- even his entire jaw in the bargain. Who cares about that good-for-nothing?"
"No! No!" Marie wept. "You're not going to get him -- my dear Nutcracker! Just look at the way he watches me so sorrowfully and shows me his little, injured mouth! But you're a coldhearted person, Fritz -- you beat your horses and you even let a soldier be shot dead!"

I have little sympathy for Fritz. His father scolds him for being a bad general -- after all, you do not make wounded soldiers continue the battle; but I'd say he is not a very good human in general. As they are about to go to bed, Marie begs the Nutcracker not to blame her brother, as he has "just gotten a bit hard-hearted in the wild military", and promises that Godfather Drosselmeier will fix all his injuries. But just as she is about to leave, things get really spooky, really fast. A humming begins, as if the clocks are getting ready to strike, and she can hear words:

"Clock, tick, tock, clock, tick, tock! And everyone has to hum softly, hum softly. After all, Mouse King has a fine ear.
"Hummmmmm, hummmmmm, hummmmmm.
Strike, chime, do;
Soon there will be few!"
Marie shuddered dreadfully and she would almost have dashed off in horror if she had not spotted Godfather Drosselmeier, who sat on the wall clock in lieu of the owl, his yellow coattails dangling like wings on both sides.

Anyone who has seen Twin Peaks will probably agree with me that seeing your godfather in the place of an owl should NOT be comforting in any way. However, things quickly get worse: The room fills up with mice, who act quite unnaturally, lining up like soldiers. We are told that Marie isn't scared of mice, and so finds it rather funny; until one really creepy mouse with seven heads, all crowned, shows up; and at its signal, the mouse army starts moving towards her (any lawsuits over nightmares should be directed at the estate of E.T.A. Hoffmann, not me).

Thankfully, at that very moment, the Nutcracker and all the other toys come alive, and the Nutcracker is wonderfully gallant as he leads them all against the Mouse King (with the exception of the two girl dolls, who fall over themselves in terror at the danger of being killed while still beautiful). There is a long and detailed description of the battle. Here is an excerpt:

The battalion of elitists, showing Spartan boldness, would have torn victory from the foe, if a daring enemy horse captain had not recklessly plunged forward and bitten off the head of one Chinese emperor, who, in falling, then killed two Tunguses and a long-tailed monkey. The result was a hole through which the enemy pushed in, and soon the entire battalion was chewed up. However, the enemy had little profit from this atrocity. Just as a bloodthirsty mouse cavalierist chewed up a bold opponent straight to the middle, the mouse was given a small printed slip of paper down its throat, from which he promptly died.

Things go very badly indeed, at which point the Nutcracker

yelled in utter despair: "A horse, a horse, my kingdom for a horse!"

and would have been captured, except Marie throws a shoe at them before falling into the glass cabinet and fainting away.

When she wakes up in bed, she is scolded by her mother for having played with the dolls, scattering them all over the room. Nobody believes her story. Godfather Drosselmeier comes to visit, acts very strangely, and offers the Nutcracker healed and good as new (though missing his sword). He also tells Marie "The Tale of the Hard Nut", which I believe is what is missing from the Dumas/ballet storyline:

Princess Pirlipat is the most beautiful girl in the world. She has the usual golen hair etc.

In addition, Pirlipat brought two rows of small pearly teeth into the world, and two hours later, when the grand chancellor tried to examine her facial lineaments more closely, she bit his finger so hard that he shrieked: "Oh, Jimmy!" Then again, others claim that he yelled, "Owww!" Opinions are sharply divided even today.
In any case, she really did bite the chancellor's finger, and now the delighted populace knew that intellect and intelligence dwelt inside Pirlipat's little body, which was as beautiful as that of an angel.

The queen immediately surrounds the child with cats, the explanation for which is given in a lengthy flashback, where we are told that Frau Mouserink (a.k.a. the Mouse Queen) and her horrible family once gobbled up nearly all the bacon for the king's sausages (a crime, if there ever was one), and unsure how to properly punish them, he handed the task over to the royal clockmaker and adept (read magician), Christian Elias Drosselmeier (coincidentally, the name of the children's godfather), who sets up a cunning set of mousetraps, executing Frau Mouserink's relatives in droves. Frau Mouserink herself survives, however, and appears just as the Queen is preparing lung puree for the king

"My sons, my relatives have been killed. Be careful, Your Royal Highness, make sure that Mouse Queen doesn't chew the little princess in half -- make sure."
Thereupon she vanished again and was seen no more. But the queen was so terrified that she dropped the lung puree into the fire; and so Frau Mouserink spoiled a second royal treat, which infuriated the king.

The ploy of cats does not work, of course (the cats fall asleep), and Frau Mouserink turns the child into an ugly creation, very like a Nutcracker. Refusing to see that it is his own fault for making such a fuss about a bit of bacon in sausages, the king declares that unless Drosselmeier manages to solve the problem within four weeks, he will be executed. And Drosselmeier tries very hard.

He took Princess Pirlipat apart very adroitly, unscrewed her little hands a feet, and viewed her inner structure.

But in the end he despairs.

Drosselmeier started weeping bitterly, but the princess delightfully cracked nuts.

Which gives him an idea, and together with an Astronomer (by which I suspect Hoffmann means Astrologer), he finds the solution:

The shell of the Krakatuk Nut was so hard that a forty-eight-pound cannon could have charged across it without breaking it. But this hard nut had to be chewed up in front of the princess by a man who had never shaved and who had never worn boots.

And so they go searching for the nut, and when the find it (coincidentally in the possession of Drosselmeier's cousin, they get the story of how it arrived there -- which is impressively full of further coincidence; and to top it all off, it turns out the son of this very cousin fulfils the criteria for the man who should crack the nut. Just as he is completing the ceremony, however, Frau Mouserink sabotages the final step, and while the princess is restored, the young man takes on the Nutcracker appearance instead. The king has promised his daughter to whoever cures her, but when the princess sees his changed appearance, she is horrified, and the Nutcracker is unceremoniously thrown out. The Astronomer declares that

his deformity would vanish only when Frau Mouserink's son ... had become Mouse King. That son would have to be felled by his own hand, and a lady would have to fall in love with him despite his defects.

Back in the present, the Mouse King institutes a protection racket, where he threatens to eat the (now swordless) Nutcracker unless Marie gives up first her sweets, then her sweet dolls, then her picture books and her new dress.

Eventually she gets her brother to provide a new sword for the Nutcracker, however, and the Mouse King is promptly killed. The Nutcracker, or rather young Drosselmeier, gives Marie the seven crowns, and invites her into his kingdom (made entirely of candy).

When they passed through the gates, which looked as if they were built out of macaroons and frosted fruit, silver soldiers presented their rifles, and a manikin in a brocaded robe threw his arms around Nutcracker and said: "Welcome, dearest Prince, welcome to Jamburg!"

In the middle of the excitement, Marie falls asleep, and again wakes up in her own bed. It is beginning to look like Marie is just having a series of vivid dreams. But one evening, as she tells the Nutcracker that she would not be as mean as Princess Pirlipat, who rejected him for his looks alone, there is a bang, she falls of her chair, and Godfather Dosselmeier's young nephew arrives to visit. He is a very friendly, beautifully dressed (we have established the importance of this) young man. Not to mention,

During the meal, the well-behaved young man cracked nuts for the entire company.

Which is really all you can ask for.

The story does get a little creepy when they are instantly engaged, and it is suggested that they get married only a year later -- because throughout the story I have thought of Marie as being no more than six. Feel free to enlighten me on that score. It is a lovely story in most other respects (wonderfully snide, and with enough puns (certainly in the English translation) to satisfy even Tor; I might just learn German to read it in the original.