Boys. Too many boys. The illusion. The hope that there is one more chance. That is the illusion.
The song starts at 1:30. I have left the entire scene to give context for the song.
In the previous scene, Obergefreiter (lance-corporal) Conrad, the loyal aide and chauffeur to Oberst (colonel) Martin Hessler, reluctantly tells his colonel that the war would soon be over:
"The illusion. Maybe I'm not using the right word, colonel. I'm not an educated man. The hope that there is always one more chance. That is the illusion.......this new command is an illusion. Give it up."
The colonel becomes irate:
"I am Martin Hessler. Four years ago, my panzers overran Poland in one week. That was no illusion. In 39 days, my tanks smashed all the way to Paris. That was no illusion. I conquered the Crimea. That was no illusion. Today......I was given a brigade of Tiger tanks. When I have a brigade of tanks......that is reality."
The corporal responds:
"And who will drive your tanks? The men you led were soldiers. Veteran soldiers. Are there any left? What will they give you now? I was by your side in Poland, France, Crimea. Look at me, colonel, I'm not the same man. I jumped in a ditch today at the sight of an unarmed reconnaissance plane. My two boys remember me as a good soldier. They wouldn't believe it. But, colonel, I am not the only one. How sure can you be of the men who will drive your tanks?
The colonel then demands to see his troops. The scene opens with him inspecting his troops. In this scene, you can see the Colonel realizes Conrad was right. "Boys. Too many boys". He realizes all is lost. And presumably, a tank commander realizes this and breaks into the song. Hessler regains his (false) confidence, starts to sing as well, and forces his corporal to start singing to regain his confidence.
Of course, the corporal was right. The war by then was clearly lost.