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Paul Lazzaro tries to steal a pack of cigarettes from under the pillow of an Englishman, who wakes up and breaks his arm. This Englishman played the role of Blue Fairy Godmother in the English officers' production of Cinderella for the Americans during their first night in the POW camp.
Lazzaro promises that he will have the Blue Fairy Godmother killed after the war for daring to break his arm, but the Godmother (who actually seems kind of menacing) says that he'll get Lazzaro before that happens. It's this guy who provokes Lazzaro into telling Edgar Derby and Billy Pilgrim his whole philosophy on revenge (see Paul Lazzaro's "Character Analysis").