The Prestige begins with shots of several dozen top hats inexplicably strewn about in a forest. Cutter (Michael Caine), in voiceover, explains the three parts of a magic trick while performing a disappearing bird trick for a little girl. Part one is the pledge, where the magician shows you something ordinary, like a bird. Part two is the turn, where he does something extraordinary, like make the bird disappear. But this isn't enough. There always has to be a third act, the prestige, where you have a twist, and bring the bird back. Only then will the audience applaud.
Robert Angier (Hugh Jackman), stage name "the Great Danton," attempts a transporting trick that involves walking under a giant electrical machine with a Tesla coil and then disappearing through a trapdoor. Except that he falls straight into a giant tank of water that has been placed under the stage, and is automatically locked inside. A man in the audience, who we shortly learn is fellow magician Alfred Borden (Christian Bale), stage name "the Professor," forces his way beneath the stage in time to see Angier drown.
After this introduction, we follow three timelines at once. In the present day (19th century England), Borden is on trial for murdering Angier, who we learn was his greatest rival. Cutter is revealed to be Angier's engineer, the man who builds the machinery for his tricks, and the little girl is Borden's daughter Jess (Samantha Mahurin). Cutter confides to the judge in a private meeting that the machine Angier was using wasn't built by him, but by "a wizard," and it legitimately did what it appeared to do.
The trial does not go well for Borden, and he faces execution. Later, in jail, Borden is approached by the solicitor for a collector, Lord Caldlow, who is interested in buying his secrets, particularly the secret of Borden's famous "Transported Man" trick. The same collector has also bought all of Angier's equipment and props.
When Borden refuses, the solicitor threatens that Jess is in danger of being declared an indigent orphan and sent to the workhouse unless his patron intervenes. As an incentive, he gives Borden Angier's diary, which documents the time he spent in Colorado trying to learn Bordon's secret.
Borden's reading of the diary in prison frames the second part of the narrative, which is from Angier's point of view. Angier is on a train in the Rocky Mountains, headed to Colorado Springs, Colorado, on his way to see the notorious scientist Nikola Tesla (David Bowie).
Disembarking at the train station in town, Angier is taken by coach to the inn, where he gets an unusually warm welcome from the hotel staff. The manager tells Angier that he's their first guest of the winter. Angier asks if a ride can be arranged to take him up to Pike's Peak the next day, but is told that the peak is closed for experimentation.
The next day, Angier is dropped off on a dirt track in the woods, at the farthest point the carriage can take him. He makes his way up to the fence surrounding a clearing. He is immediately thrown back as the fence is electrified. Tesla's assistant Alley (Andy Serkis) comes out of the gatehouse, thinking at first that Angier is another intruder, then recognizes him, saying he's seen Angier's London show.
Angier says he's come to ask Tesla to build him a machine like one that he believes Tesla built for Borden -- the machine that allows Borden to do the "Transported Man" trick. Alley says he can't help Angier, and Angier heads back to the hotel, disappointed. Alley takes satisfaction when Angier, back turned to him, correctly guesses that Alley is holding a gold watch in his hand.
Angier sits down in his room and begins decoding a diary he stole from Borden, which is encrypted with a particular five-letter-word passcode (important later). Borden's diary frames the third thread of the narrative, which goes back to the very beginning.
Angier and Borden are partners, up-and-comers working for an elderly magician named Milton (Ricky Jay). Milton also employs Cutter and Angier's wife Julia (Piper Perabo). Their best trick is an underwater escape act. In this act, Angier and Borden are planted in the audience and called up to the stage to tie Julia's wrists and ankles before she is hoisted up on a pulley and dropped into a water tank.
A curtain descends on the tank, and Julia slips the knot around her wrists and escapes using a trick lock on the tank. As a safety precaution, Cutter is positioned stage right, behind the curtains, with a stopwatch and an axe.
Angier and Borden are on friendly terms, though Angier is somewhat concerned that Borden might be using a knot that is more difficult for Julia to slip. We learn that Angier is using an alias so he won't embarrass his prominent family with his theatrical pursuits, while Borden and his engineer Fallon come from a rougher background. Borden is much more ambitious than Angier, isn't afraid to do dirtier tricks, and wishes Milton would try more dangerous tricks, like a bullet catch. Borden claims to have created a trick that will be his masterpiece.
One day, Cutter sends Angier and Borden to watch a Chinese magician, Chung Ling Soo (Chao Li Chi), and figure out exactly how the man makes a heavy goldfish bowl (filled with water and goldfish) appear from under a cloth. Borden immediately deduces that the old magician is really putting up a front: he's holding the bowl between his legs under his skirt, hiding the strength required to accomplish the trick by always appearing frail in public.
Borden admires the way the Chinese magician goes to such an extreme that he "lives" his performance at home. Angier is surprised, since when he tries holding an empty goldfish bowl at home, he has a hard time carrying it.
As his prize for working out the fishbowl trick, Borden gets a few minutes onstage assisting Milton during a performance, where he performs a trick where a bird and cage disappear simultaneously, and then the bird reappears. A boy in the audience becomes upset when he realizes the bird in the cage isn't the same as the one that reappears.
Borden tries to help the boy's aunt, a woman named Sarah (Rebecca Hall), to console him. After the show, we discover that the bird in the cage has to die to achieve the illusion, as Borden is seen tossing the original bird in the trash. Borden and Sarah strike up an acquaintance and become romantically involved.
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