When the managers of the Opera Populaire enter into an agreement with Harold Zidler of the Moulin Rouge to have the famous Sparkling Diamond perform and sing at the Opera Populaire, Erik meets the lovely courtesan Satine. What happens when the Phantom meets the Sparkling Diamond? What will he think? When he learns of her illness will he be able to find a cure?

After the Duke leaves, the Moulin Rouge falls into debt and Harold has to fire actors left and right. After the Opera Populaire is burned to the ground, everyone is jobless. Full summary inside.