In the Middle Ages somewhere in northern Europe, a woodcutter named Claus delivers hand-carved toys to the children of his village each Christmas, accompanied by his wife Anya Claus, Judy Cornwell and their reindeer Donner and Blitzen. Upon trying to cross a dense forest, they all succumb to the cold when their sleigh is caught in a blizzard and awaken in the North Pole, a place where its inhabitants seem to endure timeless life. They are greeted by the resident elves, and their leader Dooley explains that Claus’s arrival was foretold and that his destiny is to deliver elven-made gifts to children all around the world.
The following Christmas Eve, Claus is crowned Santa Claus by the ancient elf, who declares that the night will last as long as necessary to deliver gifts to every child on Earth. He makes the voyage in his sleigh, pulled by Donner and Blitzen and six other reindeer, who are fed hay sprinkled with magical dust that grants them the power of flight. As the centuries pass, the mythology and traditions surrounding the mysterious Christmas benefactor deepen and widen, turning a humble gift-giver into a global legend.
By the late 20th century, the ever-growing workload wears on Santa, and Anya suggests he take on an assistant. Santa selects Dudley Moore as Patch, an industrious inventor with ideas for modernization. Patch brings a new machine and a dream of automating toy production, hoping to spread more joy with less strain. While delivering toys in New York City, Santa befriends a homeless orphan boy named Joe, who rides along as a passenger and witness to this changing era of toy-making. After a bold attempt at a maneuver called the “Super Duper Looper” ends in a setback, Santa returns Joe and meets a wealthy orphan girl named Cornelia, Carrie Kei Heim, who quickly befriends Joe and becomes part of the unfolding tale.
When Patch’s mass-produced toys begin to malfunction, he resigns as Santa’s assistant and leaves the North Pole in shame. He ends up in New York, where Cornelia’s unscrupulous step-uncle B.Z., John Lithgow, faces a federally mandated shutdown of his toy company for knowingly producing unsafe toys. Seeking redemption, Patch approaches B.Z. with a plan to distribute magical candy—lollipops laced with flight-dust that would let people fly briefly. Realizing the potential, B.Z. has Patch strengthen the formula and distribute them from a flying car on Christmas Eve, a move that proves far more popular than Santa’s traditional toys and leaves the old figure feeling sidelined and discouraged.
With success comes risk, and B.Z. begins planning a second wave, “Christmas II,” for March 25, this time distributing candy canes laced with the same magical dust. But Cornelia and Joe overhear troubling news: candy canes explode when exposed to heat, and B.Z. plans to flee to Brazil, leaving Patch to shoulder the blame for any catastrophe. When B.Z. discovers the eavesdropping, he captures Joe, and Cornelia, in a desperate bid to save her friend, writes a letter to Santa. Breaking his long-held schedule of December-only flights, Santa travels to New York in January to help. Cornelia alerts the police, and a tense chase ensues as B.Z. tries to be arrested but escapes by eating several magic candy canes at once and leaping from a window, eventually floating uncontrollably into space.
Patch discovers Joe tied up and frees him. Seeing a wood carving resembling Patch that Santa made for Joe, Patch realizes how much Santa misses him, and he and Joe head for the North Pole in the flying car, with the candy canes aboard. Sensing the danger, Santa and Cornelia pursue them in the sleigh. The candy canes’ power has reached a critical point, and Santa cannot catch up in time to rescue them. He understands that the only way to save Patch and Joe is to perform the legendary “Super Duper Looper”; the reindeer are initially scared, but they rally with resolve to execute the daring dive and catch Patch and Joe as they fall from the exploding car. Patch makes it back to the North Pole, where Santa welcomes Joe and Cornelia to live with him in the workshop, completing a loop of generosity, redemption, and a renewed family at the heart of the season.
