So far, the best show this holiday season is found inside the tiny, intimate Back Room stage of Rec Room Arts on Jackson Street. Who knew? (And by intimate, I mean only 30 seats per show.)

Who knew this edgy, provocative, disturbing theater company (Blackbird, Dead Rock Star Sing-A-Long Club, Sender) could present an opera? And present it with such beguiling style, such disquieting undertones, such finesse? Houston Grand Opera could learn a thing or two.

Who knew that Englebert Humperdinck's 1893 opera Hansel and Gretel, a behemoth of a Germanic bonbon, could fascinate so completely? The wizards at Rec Room unpeel layers of angst amid constant enjoyment. It's like watching live-action Guillermo del Toro channeled through Jean Cocteau.

Everything's smaller at Rec Room, much smaller.

Humperdinck's massive orchestration is reduced to piano (although pianist Andrew Schneider plays like Liszt). The three-act's score has been cut to an hour (deftly by music director Mark Buller). There is no angelic choir; no children's chorus at all, just two eerie presences, Jacqui Touchet and Emma McDonough. Yet everything feels right. In a most harmonious way, the essence of Humperdinck's thick, creamy music is evident through the imaginative stagecraft and impressive cast. This is music making of a very high order.

In a state of wonder we enter into a translucent forest beclouded in fog. We can barely see who's sitting next to us. Twigs and branches envelop us. Two rows of seats encircle the small playing area. It's eerie and enchanted and ripe with mystery. This is folk tale with a downtown kick, the stuff of dreams – the stuff of nightmares.

The singers are but an arm's length away. If you reach out, you could touch them. But if you did, they might dissolve. It's a haunting beginning.

Rec Room deconstructs the primeval Grimm tale in disarming fashion. Destitute youngsters Hansel and Gretel (mezzo Emily Walton and soprano Julia Fox) would rather play than do chores. Exasperated pill-popping mom (mezzo Megan Berti) sends them into the woods to find food. When Dad (baritone Nnamdi Nwankwo) comes home with a six-pack of beer and a sack of sausages, he's aghast that mom's sent the children into the dangerous forest where the witch dwells. Lost, hungry, and afraid, the kids fall asleep under the benign spell of the Sandman and then awaken to the dulcet strains of the Dew Fairy (tenor Brian Yeakley, who doffs his Sandman's medieval cowl to reveal a very fey Cupid). But it's too late, for the witch (Berti) has ensorcelled them. Like a demented Julia Child, she proceeds to fatten them up for the gingerbread they are to become. The resourceful duo breaks the spell and push the witch into her own oven. Dad finds his lost children and the family rejoices.

Paring down Humperdinck's lush score to lone piano does no major disservice, for the romping performers, under director Matt Hune's expert eye, add every missing texture.

And if there's anyone who adds effulgent orchestration it's Berti, whose showstopping Witch is one of the wonders of the world. In bizarre gypsy garb and Rastafarian blue hair, with a cackle to rival Margaret Hamilton's, she races around the kitchen, slaps dough on the table, sharpens her cleaver, and cracks eggs with panache. Iron Chef is small potatoes next to her. She's the opera's most outrageous character, and Berti, like a vision out of Bosch, cooks on all burners.

But the master chef remains Rec Room's artistic director Hune who whips his exemplary team into Cordon Bleu territory. They create a most flavorful dish, piquant and peppery. Set and lighting designer Stefan Azizi and installation artist Mina Gaber stun with that overwhelming twig forest and autumnal look; while costumer Clair Hummel overlays the fairy tale with strikingly hip flourishes (all that '60s crochet, safety pins, and ashen makeup).

The only downside is the physical size of the Back Room. At 600 square feet, the Back Room is too small to contain larger-than-life-size opera voices. The reverb will kill you, and many of the words (even in English) get squashed and unintelligible as they careen through the tiny space. Muffling an opera singer is anathema, but a bit less projection wouldn't hurt.

Imagination and creativity run wild at Rec Room. The artists have created the tastiest present under the tree. Humperdinck is smacking his lips. Who knew?

Hansel and Gretel continues through December 23 at 7:30 p.m. Thursdays, Fridays, Saturdays; and 2:00 p.m. Saturdays at Rec Room Arts, 100 Jackson Street. For information, call 713-344-1291 or visit recroomarts.org. $25.