The Solomons experience their first Christmas. Dick is disillusioned but finally gets the Christmas spirit. Sally gets a job wrapping presents at the mall. Harry takes a job as a mall Santa's assistant and discovers that he isn't the real Santa. Tommy tries to find the perfect present for August. Albright gets drunk on rum balls.

The annual Daily Planet Christmas Party is underway, and everyone but Lois is in the spirit of the season. Perry has bought a gigantic tree, Jimmy is showing off his new girlfriend, and the Kents have finished their Christmas shopping. Clark tries to get his wife to embrace the Christmas spirit but is sidetracked by a couple superhero rescues he must perform. He is on his way back to the party when he meets Mister Mxyzpltlk, a imp from the fifth dimension. Mxyzplitlk has plans for this planet and starts a time loop that soon has the whole world on the brink of chaos. Only Clark knows what is going on, and he must find a way to get Lois out of her funk so that she can help him break the time loop and restore hope on this Christmas Eve.

Chalmers buys his dream cara Honda. Someone has stolen the H from the insignia on its hood, making Chalmers cry like a little girl. Skinner tries to find the culprit. Meanwhile, Homer obtains a telemarketing machine. Skinner conducts a search of the students' lockers and discovers that the usual suspect, Nelson, had stolen it. Nelson gets detention, but also the admiration of Lisa. She falls for his rebellious ways and tells him how much she likes him. Homer's telemarketing machine calls for people in Springfield to send one dollar to "Happy Dude at 742 Evergreen Terrace Springfield." Nelson disgusts Lisa, but Marge tells her to try to change him. Her subsequent attempt leads to her first kiss. Nelson's friends are mad at him for having a girlfriend. They want to attack Skinner's house but Nelson will only join them later. Homer's auto-dialer gets him in trouble with the cops. Nelson gets in trouble for his prank on Skinner. Lisa decides to break up with Nelson, leaving an open window for Milhouse. Homer rigs the telemarketing machine to dial an apology to everybody in town.

Mulder's dreams help him in finding the body of a little girl which reopens one of his old cases in the Violent Crimes Unit and leads him to believe the killer he captured had more victims and may have taken his sister many years before.