A hairy creature named Sugarplum McJingles wants to be one of Santa's elves, but all the toys he makes are terrifying. The kids’ attempts to show him how to create less terrifying toys fail, so they take the hairy creature to Santa's workshop in the North Pole, where he can help Santa make toys for creatures. But once Santa's sleigh is loaded up and ready to go, the gang realizes Santa's reindeer have been chased away by a dragon-like creature...