When Maria finally wakes up, she is in her own bed and sunlight shines through the window. Her mother chastises her for disobeying her and staying up late while her father speaks with a doctor. Maria attempts to convince her parents that the battle was real, and she hears the Nutcracker’s quiet voice thank her for saving him. One evening during Maria’s recovery, Drosselmeier arrives to check in on her. She cannot help but scold him for summoning the mice and failing to help the Nutcracker defeat them. He has little to say in response to these accusations, but he does bring the Nutcracker, fully repaired, back to her. In addition, Drosselmeier offers to tell Maria and Fred the story of Princess Pirlipat, Lady Mouserings, and how the Nutcracker came to be so ugly.
Princess Pirlipat was a beautiful little girl born to the King and Queen. While the kingdom celebrated, the Queen worried about her daughter’s safety due to an old threat made by Lady Mouserings, a mouse queen living in the castle. One day the King requested sausages, and as the Queen began preparing them, she heard the Lady Mouserings begging for a bite. The Queen invited her to sample the fat, but soon her entire mouse family emerged and began to eat. While some fat remained, it was not enough to satisfy the King. He wailed at the inadequacy of the sausages and resolved to seek revenge. The palace watchmaker, named Christian Elias Drosselmeier, aimed to make a trap that would drive out the mice, and while he failed to trap Lady Mouserings herself, all seven of her sons died. This tragedy drove Lady Mouserings to threaten the princess.
Drosselmeier continues telling the story to Maria and Fred the next evening, and he explains that, despite all of the precautions, Lady Mouserings managed to touch Princess Pirlipat’s face. This brief interaction caused her head to swell, her legs to shrivel, and her mouth to grow wide. Distressed by this turn of events, the King demanded that Drosselmeier find a cure for the princess or face execution. Princess Pirlipat developed an increasingly strange appetite for nuts, and Drosselmeier went to the royal astronomer for assistance. Together, they discovered that the key to reversing the curse was to find an unshaven, shoeless man who could crack the nut Crackatuck and give it to Princess Pirlipat.
On the following evening, Drosselmeier explains that after fifteen years, the men met Drosselmeier’s brother, Christopher Zacharias, in Nuremburg. He possessed the rare nut Crackatuck and had a son who matched the astronomer’s vision. When they brought Drosselmeier’s nephew to the palace, the King revealed that whoever broke the curse would inherit the kingdom and win Princess Pirplipat’s hand in marriage. Young Drosselmeier succeeded in cracking the nut Crackatuck, but Lady Mouserings appeared and prevented him from taking the required seven steps backwards. He tripped, killing her, and took on the curse himself. Despite the ridicule he suddenly faced, the astronomer predicted that the nephew would become a man again when he found a woman who loved him despite his deformities.
When Maria finally recovers from her injury, she reunites with the Nutcracker and removes him from the glass case. She is adamant that he is really Drosselmeier’s nephew, and she laments the fact that her godfather has not helped him break the curse. She even goes so far as to confront Drosselmeier about this very subject later that evening, although her family dismisses her concerns as fever dreams. Only Drosselmeier seems to acknowledge that there may be truth to her tale.