The 31-year-old - who moves within two Grand Slams of Nadal and five behind Roger Federer's record 20 men's singles titles - last held all four majors after winning the French Open in 2016, and he will look repeat that feat at Roland Garros later this year, where Nadal will once more be his greatest threat.
He's also bidding for a 15th Grand Slam trophy overall and third in a row.
And made the Serb take his game to superman levels, as in his record-setting 5-7 6-4 6-2 6-7 (5-7) 7-5 triumph over Nadal in 2012 in Melbourne, the longest final in grand slam history that lasted seven minutes shy of six hours.
Djokovic was incredibly consistent in the first two sets, making just four unforced errors to Nadal's 20.
At the 2012 Australian Open, Djokovic spent almost 11 hours on court in his last two matches.
"It was highly unlikely 12 months ago that I would be where I am today, a year later", Djokovic said.
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Nadal has beaten Djokovic only three times in 16 meetings since the second of his US Open final victories over him in 2013.
"Of course, it motivates me", said Djokovic, who earlier posed with his trophy for "the most lovely and the most expensive" photograph of the night with four Australian tennis greats including Rod Laver and Roy Emerson.
Djokovic, taking home his 15th Grand Slam title, returned serve.
The ruthless Serb then increased his grip on the match by winning the second set, sealing a decisive break to go ahead 3-2 before fending off Nadal's attempts to come back.
"To be standing now here in front of you today and managing to win this title and three out of four Slams is truly wonderful, " Djokovic said.
"It's quite unreal we are still playing at this level and still competing for the biggest titles in sport and it's just an wonderful evening", he said, pausing frequently to hold back his emotions.
But Sunday at Rod Laver Arena, Novak Djokovic had an answer for each one of Nadal's new strokes and tactics.
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He racked up 28 unforced errors while Djokovic leaked only nine, in an astonishing display of control.
In 2005, he overcame the disappointment of a fourth-round exit at the Australian Open by dominating the clay court season, and capped it by beating Federer in the French Open semifinal on his 19th birthday.
"It was so important to be where I am today, coming back from injury, and it's good inspiration for me for what's coming, " Nadal said.
Djokovic left Nadal smirking or gritting his teeth or punching his racket strings, unable to compete at all. I see he has a slightly different service motion that has worked very well. "The ultimate challenge there is to win against Nadal".
Djokovic was ruthless, dropping only one point in the first three games, and only one on serve in a first set that was far less close than the scoreline suggested. "I'm going to keep fighting, keep practicing, [doing] all the things I have to, to give myself a better chance in the future".
Not a shabby returner, either, Nadal could make no headway on this day.
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However, that may be about to change after a group of European leaders gave Nicolas Maduro an ultimatum on Saturday. But he added that he was still willing to talk with the opposition even if he "had to go naked".