Ilyana and Mary Jane, second grade rivals, both fall in love with the same ballerina doll in a shop window. Mary Jane vows her rich father will get it for her, while Ilyana despairs. The doll, Noelle, doesn't want to be owned by anyone; she dreams of being on stage. It is her dream that comes true first, when she is used as one of "Clara's" props in a production of The Nutcracker.
In the meantime, Ilyana and Mary Jane prepare for the class Christmas pageant. Ilyana dresses up like Noelle, and her performance is spotted by her teacher's fiance, the propman from The Nutcracker who wants Noelle to belong to a little girl. Ilyana later finds Noelle under her Christmas tree.