After being shot down by the police, the infamous Santa Claus Killer Ricky Caldwell, portrayed by Bill Moseley, lingers in a six-year coma with a transparent dome fixed to his skull to repair the damage. Dr. Newbury, the eccentric physician, attempts to reach Ricky by enlisting Laura Anderson, a blind clairvoyant girl played by Samantha Scully. Laura, introduced to the project during a particularly intense session, begins to doubt the experiment after one Christmas Eve encounter, but Newbury urges her to persist, promising more communication once she returns home to visit her grandmother for the holidays.
When Laura is picked up from the hospital by her older brother Chris, a drunk hospital employee dressed as Santa Claus stumbles into Ricky’s room, taunting the comatose man and waking him. Ricky escapes, killing the Santa impersonator and a receptionist on the way out, seizing a letter opener as he flees.
From there, Laura is introduced to her brother’s girlfriend, a flight attendant named Jerri, whom Laura doesn’t warm to. The trio heads toward Granny’s house, all while Ricky, aided by the mental link with Laura, tailors his path toward them. He acquires a truck and fuel after murdering a motorist and a gas station attendant, reaching Granny first. Granny, hoping to be kind to the troubled figure, is killed when Ricky, provoked by a Christmas gift, lashes out.
Meanwhile, Lieutenant Connely and Dr. Newbury discover two hospital staff murdered, and they begin to close in on Ricky, realizing that his fixation centers on Laura after surveillance footage reveals him uttering her name. Reaching Granny’s residence, Laura senses something is amiss, but Chris dismisses her concerns. When Granny fails to appear and the car is found sabotaged, Laura’s anxiety intensifies, and Chris and Jerri decide to investigate.
The tension escalates as Laura senses Ricky watching from the window and screams, forcing a rapid return to the house. The phone line is dead and Laura’s photo disappears, confirming Ricky’s presence. Ricky bursts in, throttling Jerri before Laura is helped by Chris, who stabs Ricky’s shoulder with a knife. Elsewhere, Newbury has driven off, intent on persuading or trapping Ricky rather than letting Connely kill him, leaving Connely to manage the car ride and surveillance.
Armed with an old shotgun, the trio—Chris, Laura, and Jerri—search for help but are ambushed by Ricky, who wounds Chris in the chest. Laura and Jerri retreat to the house as Newbury confronts Ricky in an attempt to calm him with a tape of their sessions. Ricky, drawn to the tape, reaches for Newbury, who is then stabbed in the stomach. The women barricade the door, but Ricky breaks in. While looking for a firearm, Ricky kills Jerri, and her body is found by Laura.
Ricky closes in on Laura as she tries to escape, prompting a desperate struggle around the house. A vision of Granny appears to Laura, and the house darkens as Granny’s body is found hanging. Laura’s attempt to attack Ricky is easily countered, and Ricky begins to choke her. Chris arrives just in time to shoot Ricky with a shotgun, but the blast proves useless against the killer, who wrests the weapon and subdues Chris. As Ricky closes in on Laura, she seizes a broken stick and holds it to shield herself, ultimately causing Ricky to impale himself.
With backup arriving, Connely finds a dying Newbury and Laura cradling her brother’s body inside the house. As paramedics rush a survivor to the hospital, Connely escorts the grieving Laura away. Before retirement, Laura softly wishes the lieutenant a Christmas greeting, and Ricky’s final moment lingers as he breaks the fourth wall with the chilling line, “... And a Happy New Year.”
