In the Forman basement, Eric asks if Donna really has to work on Christmas Eve; she tells him that it's her first shot at DJ-ing, and if she does well then she'll get a regular spot. Eric says that he'll come and visit her, and bring her something sweet, ... and some cookies too. Donna doesn't laugh. Jackie comes in and says that she's just been kicked of f the cheer leading squad, and Hyde has to take her to the dance tomorrow so that she can get back on it. He says no, but she just keeps talking until he finally gives in and says yes. Then he tells the gang that if he's going, then they're all going too, but Kelso says no, Fez says no, Eric says no... until Kitty comes downstairs and tells them all that she's signed Red up to be Santa at the mall and wants them all to be elves; then Eric tells her that they'd love to, but they're all going to the Christmas dance at the high school.
[Opening credits: the cast names are in red script with holly leaves around them; there are Christmas bells in the music, and a "Ho Ho Ho" after the "I love Wisconsin!"]
[Scene change: Hyde, Jackie, Eric and Donna all look up at the camera as it pans over them.]
In the Forman living room Hyde, Eric, and Donna are watching A Year Without Santa Claus on TV. Donna asks what time Eric will be coming to the radio station on Christmas Eve; he tells her that he'll be there once the school dance gets lame, and since it starts at 8 p.m., he figures he should be leaving around 8:02 p.m. Kitty fits Red for the Santa suit; Bob comes in and and can't believe that Red is replacing him. Kitty tells him that he can be an elf; he reluctantly agrees but says that he wants to be a participating elf, not one of the ones stuck in the back making toys. Jackie comes in with a suit for Hyde; he tells her no, but she just keeps talking until he finally says yes.
[Scene change: Kelso dances on the screen.]
At the library, Kelso comes in and has a list of reasons for Brooke why he'll make a great dad: First, he's a waiter, so they'll never run out of straws. Brooke tells him that she appreciates his effort, but no. He says that if they hang out, she'll see that he's maturing, and adds as proof that just the other day, he fell asleep on the sofa while watching golf. She says that if the situation were different, she's sure that he'd be a good friend, but she just doesn't want to spend time with him. Kelso suggests a compromise and she agrees, saying that he can come to the library on Christmas Eve to help her hang decorations.
[Scene change: Eric, Hyde, Kelso and Fez standing in a circle, looking down at the camera.]
At the school dance, Jackie tells Hyde to make her look good in front of Julie, the head cheer leader; she introduces him to Julie as Steven J. Hyde III, and Hyde says that the first two are in jail. Jackie laughs it off as a joke; she and Julie trade insults about their clothes, then Julie leaves. Hyde asks if Jackie shouldn't be nice if she wants to get back on the cheer leading squad, but Jackie explains that the cheer leaders are bad girls, and they know it, and that's the only way to deal with them. Kelso, Fez, and Eric show up; Kelso reminisces about all the places that he did it. Fez tells them that he can't spend another holiday in a locker, and then tells them that if he goes missing for a few days, they should come looking for him. Two girls come up and compliment Eric on his shirt; he's shocked because he wore that same shirt while he was in high school, and no one liked it. They tell him that he really fills out his shirt well, and one of them says it's because he's not in high school any more and so he's seen and done it all. Kelso pulls him aside and tells him that since this involves girls talking to him, it might also include a practical joke. Eric asks if they're cool now that they've graduated, and Hyde tells him that it's like margarine and butter; he's cool, but there's an after-taste. The guys walk into the gym while TNT (by AC/DC, 1975) plays; they look cool, they strut over to the Christmas tree, and Fez walks right into it, but quickly recovers and they walk off.
[Scene change: Hyde and Eric dance on the screen.]
At the radio station, Donna's on the air, playing Christmas songs, and as she introduces the song, she says her name, and plays the sound of bacon frying after she says "Hot Donna." She then proudly tells the listeners that it's the sound of bacon and she taped it herself earlier today.
[Scene change: Eric jumps in the air while Kitty and Red look at the camera.]
At the mall, Red is dressed as Santa and Kitty wants to hear his best laugh; he says, "Ho Ho." Bob tells Red that he left one of the "Hos" off, and wonders if Red even read the Santa manual. Kitty reminds Red that Santa is cheerful and jolly, and never calls a child "dumb ass." A montage scene of Red seeing the children: the first child asks for a Slinky, which Red says is stupid, and tells the child that he'll get math flash cards instead; the second child wants a pony, and Red says that ponies die, and suggests a pair of boots instead; the third child wants a futuristic flying car, and Red tells her that time will take her future away, and there'll be no flying car for her. Kitty sends the child off and tells Red that he's a bad Santa.
[Scene change: Hyde jumps up in the air.]
At the school dance, Eric is talking to a group of students, and tells them that life after graduation is sweet, adding that sometimes he has ice cream for breakfast. One of the girls asks Fez what he's done, and he freezes up and doesn't know what to say. Kelso tells them that he got a librarian pregnant. Eric tells them to just keep on keeping on, and all the girls laugh appreciatively. Eric loves the attention.
At the radio station, Donna announces another song, and then comments on air that Eric's late, and she's worried about him. She then opens the phone lines for requests, and her first call is a girl, asking for He's The Coolest Dancer by Sister Sledge and wants it dedicated to Eric Forman, the coolest guy at the dance. Donna is shocked that Eric is still at the dance and not on his way to the station. She plays the bacon sound again, and then says that it's not bacon, it's his ass when she gets ahold of him.
[Scene change: Jackie dances on the screen.]
At the school dance, Eric brings cookies to the girls and uses his "here's something sweet, oh, and some cookies too" line, and they laugh. Eric comments that he knew that was funny. Kelso tells Eric that he can't stop thinking about Brooke, then says he's going to the library to see her. Jackie tells Hyde that he doesn't look like he's having a good time; he says he's not, and Jackie tells him that that doesn't matter, he just has to look like he's having a good time. Julie comes over and wants to know why Jackie never told her that she was dating an older man; Jackie says she was too busy having fun to mention it. Fez comes over and tells them that the dance sucks and all the girls think he's a waiter. Hyde says that he has an idea how Fez can have a better time.
[Scene change: Jackie struts across the screen.]
At the mall, Red talks to a little boy, and finishes up by saying, "and that's what really happened in Vietnam." Kitty sends the little boy off, and when he asks her what an ambush is, she tells him that it's a pretty bush with yellow flowers. Red tells Kitty that he thinks he's really doing well, and feels that he really taught the last kid something. Kitty suggests that he tell a Christmas story where no one gets caught in a fire-fight. Red turns around, and Bob is in the Santa chair, wearing a Santa suit; Red wants to fight for his Santa rights.
At the school dance, Eric is dancing with the girls; Donna comes in and tells him she was worried when he didn't show up. He tells her that he lost track of time because he's a god to these people; Donna can't believe that he let everything go to his head like this. A guy comes up and compliments Donna on her radio show, and she's impressed by the attention. The lights go down; Hyde tells Jackie that they're in for a treat. Fez comes out on the stage and starts singing Blue Christmas; the football team attacks him from behind.
At the library, Brooke is decorating; Kelso comes in and tells her that he decided that instead of having a fun Christmas Eve, he'd rather have a boring one with her. He suggests that they could have fun, but Brooke knows what he wants and tells him that even though the library is closed, she won't walk around topless. Kelso helps her put up the decorations; Brooke tells him that if he thinks that by being cute and making her laugh, she'll be interested in him, he's probably right. Kelso suggests topless ornament hanging.
[Scene change: Kelso jumps in the air.]
At the mall, Red tells Bob that the mall is only big enough for one of them. Bob says that if Red can name five reindeer, then he'll willingly give up the Santa seat; Red says that he can name five toes that will be in Bob's ass. Kitty, disgusted with both of them, says that they should just rename the holiday "ass-mas." Bob tells them that he only wanted to be Santa because he was upset about his break-up with Joanne, and Donna's working, so he was lonely. Red tells him that he can be the Santa, and takes off the hat and beard as Bob sits back in the Santa throne. Just then, the last kid that Red spoke to arrives with a security guard, points at Bob in the Santa throne, and tells the guard, "That's the man who said Santa's a Commie!"
At the school dance, Donna tells Eric that all the attention is intoxicating; Eric suggests that they go drink some beer in front of sophomores. Julie tells Jackie that because Hyde is so cool and a fox, they're going to let her back on the cheer leading squad. Jackie and Julie jump up and down, squealing and then they hug, but then Jackie says that she doesn't want to be a cheer leader any more. Julie points out that they jumped and hugged, but Jackie takes that back with a shrug. Hyde wants to know why they came to the dance if Jackie doesn't want to be a cheer leader, and Jackie says that she learned something about herself tonight, and that she knows that the cheer leaders aren't really her friends. Hyde thinks it was all wasted time, but Jackie points out that she gets to keep the uniform, and Hyde says that that helps. Fez runs through the gym with the football team chasing after him.
In a montage scene, to the music Oh, Holy Night: Jackie does cheers for Hyde in her cheer leader outfit, while he watches from the sofa and gives her the thumbs up, she goes over to him and they kiss. ...Red and Kitty decorate the tree in the living room, Kitty whispers something in Red's ear and they run upstairs together. ...Brooke and Kelso are at the library, where Brooke gives him a present. He rips the wrapping off and it's a book. ...Fez pokes his head out of a locker and smiles, then sees the football team standing there and so goes back into the locker. ...Eric and Donna make out on the hood of the Vista Cruiser and then the music starts skipping. Donna says, "Oh, crap, I'm still on the air!" and runs off.
[End credits: At the library, Brooke hands Kelso presents and he guesses them by shaking. He's right on all of them, and Brooke is impressed. She hands him one and he shakes it and says that it's a Lone Ranger Cap Gun set, and when she turns to get another present, he hides it with his coat.]