In bustling New York City, Judy Graves and Lois Graves are a pair of lively, imaginative sisters aged 13 and 16 who fill their apartment with energy and questions about the adults around them. Their forgiving and patient mother, Grace, and their patient father, Harry Graves, a dedicated lawyer, provide the home’s steady center. Judy’s equally energetic friend, Fuffy Adams, drops by often, and the two girls dissect adult relationships the way they dissect movie plots, turning everyday moments into curious stories and bright commentary.
One night just before Christmas, Judy learns that her mother’s brother, Uncle Willis Reynolds, has been out of sight for years. She spins a fantasy about a dashing man whose absence is tied to trouble, only to discover the truth: Uncle Willis is a recovering alcoholic who has spent the last four years in rehab. Soon after, a handsome boy named Haskell Cummings Jr. enters their circle, stepping in as Judy’s escort to the upcoming school dance and momentarily drawing her away from her uncle-centered fantasies.
Back at home, Harry’s boss, J. B. Curtis, visits with his pretty daughter and secretary, Ellen Curtis. After witnessing a kiss, Judy’s imagination runs wild, and she confides to Fuffy Adams that her father and Ellen are romantically involved, a notion that has real consequences once truth and illusion collide.
The following day brings a surprise visit from Uncle Willis. Judy schemes that he would be the perfect match for Ellen, and right after Christmas, she secretly arranges a meeting at the iconic Rockefeller Center ice-skating rink. Willis and Ellen soon become a couple, much to the concern of Curtis, who notices Ellen’s repeating absences as she sneaks away to see Willis. Ellen does not tell her father about Willis, but Judy can’t keep the secret forever. On New Year’s Day, Judy confesses to Curtis that Ellen is seeing Willis, embellishing her tale with the idea that Willis might be a convict.
Curtis, worried and furious, scolds Harry and Grace for letting the relationship continue, and a confrontation unfolds. Willis and Ellen arrive in the middle of the argument, announcing that they have married. Curtis fires Harry for defending Willis and his family, prompting the family to reevaluate their circumstances.
Grace and the children move to live with Grace’s mother in Kansas City while Harry searches for another job, and the newlyweds are offered a place to stay until they can stand on their own feet. Curtis makes an unannounced visit in search of his daughter, and Ellen and Willis are briefly hidden away. As Judy’s school dance approaches, Haskell Cummings Jr. arrives to collect Judy, and the moment triggers Curtis’s mistaken belief that he is about to land a powerful client for his firm—Haskell Cummings Sr.—a misreading that shapes the next steps.
Realizing the misunderstanding, Harry accepts Curtis’s offer to rejoin the firm, and Ellen reconciles with her father. In a final moment of truth, Curtis is surprised to see the young Haskell enter the apartment; Judy, now poised and ladylike in a ball gown, steps out with him to attend the dance, leaving the grown-ups to marvel at how tangled emotions can be resolved through honesty, resilience, and a touch of holiday magic.
