The Planet Express crew goes skiing in the mountains on December 24th, 3000. Various mishaps happen - Hermes and Zoidberg accidentally go bobsledding, and Professor Farnsworth ends up competing in a race whilst he was asleep! At the ski lodge afterwards, Fry says he's feeling the Christmas spirit, and Leela explains that it is now called Xmas.
Back in New New York, the crew gets their Xmas tree, which is now a palm tree since fir trees have been extinct for centuries. Bender watches a news report on homeless robots getting free alcohol and goes down to the shelter pretending to be homeless. The delivery of Xmas cards comes and Leela is the only one who doesn't get any. Fry complains about how he misses his family and this makes Leela run off in tears. Feeling guilty, Fry decides to get her a present to cheer her up. Professor Farnsworth warns Fry to be back by sundown - or else Santa Claus will get him!
It turns out that back in 2801 the Friendly Robot Company built a robotic Santa Claus to determine who'd been naughty and who'd been nice. But Santa malfunctioned and he now thinks everyone is naughty. And when Santa thinks you're naughty he murders you.
Fry eventually gets a parrot for Leela but it escapes. He chases it to a clock tower and falls off, only to be rescued by Leela. Leela thinks it is sweet that Fry risked his life to get her a present, but by now it is after sundown and Santa Claus is on the loose! He finds Fry and Leela and they only just escape. They run into Bender and his robot friends who have been stealing things on their way home from the shelter, and together they all run back to Planet Express, where they think they'll be safe.
Wrong! Santa comes down the chimney and judges them all to be very naughty, except Dr. Zoidberg who gets a pogo stick. Santa tries to kill everyone else, but Dr. Zoidberg uses his pogo stick to jump up and snip the fairy lights, causing them to give Santa an electric shock. Santa is sent flying out of the chimney and the crew block the chimney to stop him coming back.
Next day the crew have their Xmas dinner, which Bender has cooked using the remains of Fry's parrot for Leela. As they eat, Santa swears he'll be back when they least expect it - next Xmas!