Imagine the following scenario:
Player 1 bets 100 | Player 2 goes all in with 125 | Player 3 calls 125
Which are player 1 options ? Should he mandatory call 125 or can he still raise on player 3 ?
Short answer: no, player 1 can't raise here.
Assuming here that player 1 opens the betting in your example, player 2's all-in is less than an official raise, so it does not re-open the betting for a player who has already acted. Player 3 is free to raise here because he has not yet acted, but he elects to call instead. If player 3 had raised, player 1 would be free to reraise. Since player 3 chose to call, however, player 1 is not able to raise, since he would effectively be raising himself. Player 1 can choose to call or fold here. Of course folding seems like an extraordinarily dumb idea, unless some really unlikely circumstances are in play.
This rule is rule 44 in the TDA rules:
44: Re-Opening the Bet.
In no-limit and pot limit, an all-in wager of less than a full raise does not reopen betting for a player who has already acted and is not facing at least a full raise when the action returns to him. In limit, at least 50% of a full raise is required to re-open betting for players who have already acted.
I guess I should qualify this in that some card rooms have house rules on what constitutes a raise and when betting is reopened, so it's possible that in some places player 1 could raise here. It's just not the most common scenario. It also seems likely in any case that an all-in with 25% more would rarely be considered to reopen the betting.