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In the 1890's, the war between the Bulgarians and the Serbs ends when Bulgarian Lieut. Sergius Saranoff routs the forces of Captain Bluntschli, the Swiss-born mercenary in charge of Serbian artillery. While fleeing from the enemy, Bluntschli takes refuge in the bedroom of Raina Petkoff, Sergius' fiancée. Raina's pride in her fiancé's victory becomes somewhat deflated when she learns that the Serbs fled because their ammunition did not fit their cannon. Bluntschli spends the night in Raina's bedroom but leaves shortly before daybreak. When he returns at the conclusion of the peace negotiations, however, he gives Raina cause to wonder whether she has chosen the right man to wed. Her hesitation makes Sergius increasingly impatient, and he eventually challenges Bluntschli to a duel. When the superior Bluntschli easily knocks the sword out of his opponent's hand, Sergius realizes that he has lost Raina, and he defies all social convention by turning to the sultry Petkoff maid, Louka, and asking her to marry him. The Petkoffs are delighted to welcome Bluntschli, the heir to a number of flourishing Swiss hotels, as their new son-in-law.