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In 1931, naïve Englishman Brian Roberts, seeking to broaden his experiences and further his education, arrives in Berlin, where he hopes to support himself by giving English lessons. Brian goes to the shabby boardinghouse run by Fraulein Schneider and there is greeted by Sally Bowles, an exuberant American singer. Sally, obsessed with becoming a movie star, is oblivious to the economic and political turmoil in Berlin, especially between the Nazis and Communists, and instead revels in the decadent atmosphere of alcohol, sex and excess. Because Brian's room is too small to accommodate pupils, Sally offers him the use of her larger room and, liking the introverted young man immediately, persuades him to move in. The Kit-Kat Club, where Sally works, is presided over by the androgynous, leering Emcee who exhorts the audience to forget their troubles while in the club, where "everything is beautiful." Brian enjoys Sally's sensual performance and is introduced by her to Fritz Wendel, an impoverished German who hopes to improve both his English and chances of landing a rich wife. As Sally and Brian spend time together, she asserts that she is "a most strange and extraordinary person" and describes her desire to become famous, as well as her loving relationship with her diplomat father. One day, while discussing Brian's work in his room, Sally attempts to seduce Brian, who responds that it is "a bit early in the day" for that sort of thing. Sally caustically muses that perhaps he does not sleep with girls, but when Brian does not reply, she promises that she would never pursue him if he prefers male companionship. Although Brian is reluctant to discuss the subject, he reveals that his three previous attempts to have sex with women were disastrous and that currently he has no sex life. Sally cheerfully offers to remain platonic friends and the pair establish a routine. One afternoon, Fritz is having his English lesson when Brian reveals that a new pupil, Natalia Landauer, the daughter of a very rich Jewish family, is to arrive soon. Declaring that he is not prejudiced against Jews, Fritz determines to romance Natalia, no matter what she looks like. Brian, hoping to make a good impression on Natalia, is aghast when Sally returns home unexpectedly. Brian charms Sally into not drinking, but when the lovely, reserved Natalia arrives, Fritz and Sally insist on remaining. Natalia attempts to converse in her stilted English until the bored Sally makes a comment about syphilis. Brian is further mortified when Sally, whose German is as bad as Natalia's English, actually remembers the German word for intercourse, leaving Natalia and Fritz open-mouthed at her audacity. Later, however, the foursome spend a pleasant afternoon together, although Fritz confesses to Brian that the "gigolo business" is not going well, as he is falling in love with Natalia. Sally comments to Brian that the only way to handle virgins is to "pounce" on them, but Brian remains dubious. One night, after Fritz and Brian dine with Natalia, Fritz's attempt to kiss her goodnight fails and Brian repeats Sally's advice to be more forceful. When he returns home, Brian finds Sally sitting in the dark, depressed because her father has stood her up. Sally sobs that while her father tries to love her, he simply does not care and thinks she is "nothing." As Brian comforts her, the couple winds up kissing and falls into bed. Their passion for each other grows, with Sally hoping that this time, she has found the right man. One afternoon, Natalia summons Sally and as Natalia tearfully confides her love for Fritz, Sally realizes that he must have pounced. Natalia states that she cannot marry Fritz because he might be a fortune hunter and is a Christian, and Sally commiserates with her. Soon after, Sally meets Maximilian von Heune, a suave aristocrat whose wealth and good looks dazzle her. Brian is jealous of Sally's new admirer, although Max attempts to include Brian in their adventures, declaring that it is his duty to corrupt them. After a raucous shopping trip, Max and Sally show off their purchases to Brian, including a fur coat for Sally, but Brian stiffly refuses the gold cigarette case offered to him by Max. As Brian and Max drive by the scene of a street brawl one day, Max observes that at least the Nazis will get rid of the Communists, and then they in turn can be controlled. Max soon suggests spending a weekend at his country estate, and there, Brian and Sally are awed by their surroundings. Max reveals to Brian that he is married, although he and his wife lead separate lives, then persuades Brian to accept a sweater and leaves the cigarette case for him as well. After a lavish dinner party, the trio gets drunk and ends up dancing in a circle in one another's arms until the overwhelmed Brian passes out. On the drive back to Berlin, Brian and Max discuss the trip to Africa that Max has proposed. When they stop at a beer garden, Brian and Max watch an adolescent boy, a member of the Hitler Youth, inspire the crowd to sing a rousing song about the future, and Brian pointedly asks Max if he still thinks the Nazis can be controlled. Meanwhile, Natalia refuses Fritz's marriage proposal, telling him that although she now believes him to be honest, it is impossible for him to marry a Jew, considering Germany's current upheaval. Soon after, a distressed Max drops Brian off at the boardinghouse, where Sally is packing for their trip to Africa. Sally, who does not know that Max is married, babbles about a possible proposal from Max, to which Brian replies that her self-delusions are absurd. As their argument escalates, Brian yells, "Screw Maximilian," and when Sally replies, "I do," Brian laughs in pain and states, "So do I." Realizing that they have betrayed each other, Sally storms out while Brian wanders the streets in a fury and provokes a fistfight with two Nazis. After receiving a fierce beating, Brian wakes up to discover Sally tending to him. She then reveals that Max has departed the country and left them three hundred marks. Deprecating their abilities as gold diggers, Sally apologizes to Brian, who shares her remorse, and the couple reconciles. At Natalia's, meanwhile, her dog is murdered by hooligans who write Juden across her front steps. Soon after, Sally tells Brian that she is pregnant and is going to have an abortion, although the illegal operation will be so costly that she will have to sell her fur coat. Brian surprises both himself and Sally by proposing marriage, and the couple drunkenly celebrates their impending domesticity. During the day, Fritz confesses to Brian that he himself is Jewish but hid the fact when he moved to Berlin to raise his social position. Brian urges him to tell Natalia the truth, and despite Fritz's protests that he is too cowardly, he soon does and he and Natalia are wed in an Orthodox ceremony. Later, Brian and Sally are picnicking and Sally is distressed by Brian's uncommunicative responses to her plans for their future. Remembering the excitement of performing in the club and the romance with Max, Sally becomes depressed. Soon after, Brian has fallen asleep while waiting for Sally to return home from work. He awakens when she enters and as she gingerly climbs into bed, asks her where her fur coat is. Realizing that she has had the abortion, Brian asks why and grows increasingly angry, denigrating her dreams of stardom and castigating her for sleeping with anyone who can further her career. Not protesting, Sally asks to be left alone. As he calms down, Brian pleads with her to tell the truth. Sally replies that they would soon start hating each other if they gave up their mutual aspirations, and implies that eventually he would be unhappy with her because of his preference for men. Brian sadly concludes that although Sally did want the baby and does love him, she did what was right for both of them. Soon after, Sally accompanies Brian to the train station as he prepares to return to England, and they bid each other a strained farewell, with Sally struggling not to cry, and Brian smiling fondly as she walks away, waving her green fingernails in the air. Sally then goes to the Kit-Kat, where she thrills the audience with a rendition of the song "Cabaret," which encourages them to live life to the fullest regardless of the consequences.