During the play, Don Juan, Christine unmasks the Phantom, revealing his horribly derranged face. In a fit of anger, the Phantom cuts the only rope supporting a huge chandelier, causing it to fall into the audience and set fire. The Phantom then drags Christine off to his lair, much to the horror of her lover, Raoul who, led by Madame Giry attempts to follow them.
On his way, Raoul falls into a flooding chamber, one of the many traps the Phantom has planted. He quickly escapes and then continues on his quest to find Chrisitine. Once he reaches Christine and the Phantom, locked in a struggle of wills, the Phantom realizes his presence, and opens the gate to his lair. When Raoul enters, Raoul turns when the gate closes, and the Phantom throws the punjab lasso around Raoul's neck, ties him up, and offers Christine a choice. She can either live with the Phantom, thereby allowing Raoul to live, or else choose a life of liberty, away from the Phantom, while leaving Raoul to death.
She tells the Phantom that he is not alone,and she and the Phantom then share a passionate kiss. The Phantom is overcome with emotion, because he has never before been touched by any motion of love, and he realizes that he wants Christine to be happy. He tells Christine to take Raoul and go, therefore condemning himself to a lifetime of misery and loneliness. Christine unties Raoul and we see the Phantom sitting in front of the monkey music box, crying and singing. Christine enters and the Phantom sings "Christine, I love you..." Christine then returns the ring which the Phantom had recently given to her.
Christine and Raoul leave, and the Phantom is left alone and unloved. He watches them leave in his gondola, and Christine looks back over Raoul's shoulder. The Phantom, overcome by sorrow and emotion, picks up a candle holder and smashes the numerous mirrors. Behind one is a passage, leading to who knows where. Upon hearing the mob coming for him, he flees in dispair, never to return. Meg Giry enters and finds the Phantom's half-mask lying next to the music box.
We then switch back to the old Raoul, we see him take the monkey music box to Christine's grave, where he places it carefully. Lying on the grave is a red rose with a black satin ribbon tied around it,like the roses the Phantom gave to Christine throughout the movie, and on the ribbon is the ring which Christine gave back to the Phantom, apparently meaning that the Phantom lived all those years.
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