A young Baghdad sultan named Schahriar must find a wife before the next full moon, otherwise the kingdom will be given to his exiled brother, Schahzenan. The brothers were born a mere four minutes apart, with Schahriar claiming the title as eldest.

Schahriar is skeptical about marrying

again, having been the target of a failed assassination attempt by his first wife and his evil brother. However, he sends the old Grand Vizier, Jafar, to find a wife for him amongst the harem, planning to kill her the day after he inherits the kingdom

Ironically, it is Jafar's own daughter, Scheherazade, who offers to marry Schahriar, revealing that she has always loved him. After the wedding, while the sultan's Chief Executioner impatiently waits outside, the newlyweds sit alone in the royal bedroom. To ease the tension and to perhaps stall her impending execution, Scheherazade begins to tell her husband a story about Ali Baba and the Forty Thieves, improvising as necessary along the way to keep the story interesting. The next morning, Scheherazade is anxious and unsure of her fate, as is the rest of the palace. Finally the decision: Schahriar sends the executioner away, at least temporarily.

While Schahriar is intrigued by his wife's storytelling skills, the ruthless Schahzenan prepares to raise an army against his brother. The sultan's Chief Executioner turns traitor, informing Schahzenan that the sultan is weak for having not yet killed his new bride. It is then that Schahzenan reveals he was truly in love with Schahriar's first wife, refusing to forgive him for having killed her. Schahzenan vows to never let his brother take anything away from him again, especially not the kingdom.

As Scheherazade spins tales of tragedy, comedy, magic and mayhem, she cleverly

creates plots that feature heroes, villains and beautiful heroines. The sultan is impressed and learns valuable lessons from the stories, realizing how much they remind him of his real-life situation with his brother. Schahriar confesses his deep love for Scheherazade and thanks her for showing him that love and laughter will always defeat evil.
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Meanwhile, the villainous Schahzenan and his army have arrived in Baghdad, ready to do battle. Upon coming face to face with his brother, Schahriar is no longer angry and afraid. He uses his newfound confidence to defeat his brother and reclaim the kingdom.

The happily-ever-after conclusion reveals that all the while, Scheherazade has been telling her two young sons the story of how she met their father, the sultan of Baghdad, named Schahriar.

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