Christmas time is here. Mr. Sheffield has to go to Washington for the holidays, leaving his children with Fran. Counting on a fat Christmas bonus, Fran buys gifts for everyone, but Mr. Sheffield surprises her with a present instead. Fran has no option but pawn her late grandmother's watch to pay for the gifts. Niles tells Mr. Sheffield, who at the last minute leaves C.C. at the airport to help Fran. He accidentally sits on the vase he gave Fran and is taken to the hospital, where a man dressed as Santa is also admitted (he was hit by a blonde at the airport). Gracie thanks the man for her gift: her dad home for Christmas. When Fran decides to invite him to celebrate Christmas with them, he's gone, and Christmas bells are heard outside the window.