In Granville, Kansas, on Christmas Eve, Lex enters the sewer tunnels and meets with Griff, who says he plans to find information for Lex to use against Jonathan Kent…or make it up. Lex asks for 24 hours and the guy notes that Lionel wouldn't have hesitated. Lex returns back to his car when a couple of street punks rob him. When Lex turns over his wallet and watch, one of them shoots him. He collapses…and wakes up in a sun-lit bedroom in bed with…Lana Lang. A young boy Alexander bounces in, calling Lex "Dad," and Lana gets out of bed to reveal she's pregnant. Lex checks his body and he has the scars of old gunshot wounds. Then his mother Lillian appears to him and says all of this can be his…if he makes the right choice.
Martha and Jonathan are preparing for Christmas Eve and discussing his senatorial race. Clark and Lana are celebrating as well when Chloe calls and asks Clark to meet her at the Planet. Lex is brought into the hospital while in his alternate life, Lana Luthor tells him of how Lionel cut him off from his funds and later they're heading to a party at the Kents. Lex takes off with his son to get a Christmas tree and they see Clark and Chloe there. They're together and Clark is a reporter and Chloe is publishing an expose on Lionel thanks to Lex's past help. They take off as Alexander finds a tree.
Back in the real world, Lionel visits Lex at the hospital and talks with Dr. Scanlan, who tells him he'll be permanently paralyzed unless they can relieve the pressure. Lionel starts to make calls despite Scanlan's warning that an operation could kill him. At the Planet, Chloe reveals she is helping out a toys-for-tots program and needs his help to deliver the toys…lots of toys. Clark begins his superspeed delivery and one girl spots him and points out there's another Santa, the real one, on a nearby roof.
Clark superspeeds up to the guy, who is clearly drunk and is contemplating jumping. The guy is depressed over the lack of Christmas spirit. At the hospital, Lionel has Lex removed from the hospital against Scanlan's advice. Lex and Alexander get back home and find a present from Lionel intended to remind him of how Lex turned his back on his father after getting shot.
Clark and "Santa" bond after Clark reveals how he and Chloe gave up their plans to deliver presents. "Santa" is convinced the spirit of Christmas is still alive then falls off the roof, but Clark pulls a rescue.
Lex and Lana arrive at the party where Lex is greeted by all, including Senator Jonathan Kent, who reveals Lex will be getting a humanitarian award. Jonathan then reveals it to the party-goers and proposes a toast. Outside on the porch, Lillian appears again and warns him to follow his heart, not his ambition. Clark interrupts and they discuss Lana and how they're good friends and they both have what they want. Martha interrupts with news about Lana, while Lex undergoes surgery. In Lex's dream, Lana gives birth to their daughter but then collapses from complications.
In the waiting room, the doctor tells Lex she's lost a lot of blood and there's nothing they can do. Lex goes to visit his father at the manor and ask his help to get Lana to a specialist in Metropolis. Lionel isn't sympathetic and warns him that when he turned his back on the senate race seven years ago, that led to where he is now. Lex returns to the hospital and shares a moment with Lana before she dies. Lillian arrives and Lex accuses her of showing him a life of pain. Then Lex wakes up in the hospital with Lionel at his side.
Santa arrives at the Planet to talk with Chloe and offer his services and Chloe accepts. When she turns her back for a moment, he disappears along with the presents. At the hospital, Lex accuses Lionel of taking a gamble because he couldn't bear having a cripple as a son, and playing god with his life.
At the Kents, the party is full swing while Chloe briefs Clark on "Santa," and they wonder if it might have been the real Santa. It starts to snow and they celebrate a white Christmas. At the hospital, Griff pays Lex a visit and Lex resolves that he needs money and power to secure whatever he needs, and keep it that way. He tells Griff to find the information on Jonathan or fake it – whatever it takes.