Long ago in the Forest of Burzee, a council meeting is held where The Great Ak tells the tale of Santa Claus to the leaders of the Immortals, hoping to persuade them to grant Claus immortality. About 60 years earlier, the Great Ak finds an abandoned baby in the snowy woods on the border of the Forest. He gives it to the lioness Shiegra to raise. However, after hearing about the discovery of the infant, Necile, a Wood Nymph, steals him from Shiegra and goes to the Great Ak, begging him to let her raise the child. After initial concern that a human was brought into the Forest which is against the law, the Great Ak allows Necile to raise the child while Shiegra stays to protect them. Necile names the child "Claus".
When Claus has grown to be a young man, the Great Ak takes him to see the mortal world and its cruelty and suffering. Claus learns that he must live there and make it better. He leaves the Forest and lives in a workshop in the Laughing Valley of Hohaho with Shiegra and Tingler, a Sound Imp. As he gets older, he works to bring happiness to children in a nearby village. He eventually makes toys (the first being a wooden black cat modeled after the kitten Blinky that Necile sent to them, which he gives to the orphan boy Weekum. He is occasionally assisted by a group of Ryls, Knooks, and Wood Nymphs from the Forest.
Meanwhile, evil creatures called the Awgwas (led by King Awgwa) are not happy with Claus's efforts to bring happiness to children, so they attempt to stop Claus from making and delivering toys. At first, they send a warning to Claus, telling him to stop or they would come for him. After Claus ignores the warning, the Awgwas kidnap him, but he calls for aid from the Knooks, who help him escape. As he and his friends make attempts to deliver toys to the village, the Awgwas repeatedly ambush them and steal the toys. Claus tries to go alone by night, but he is again ambushed.
The Great Ak has had enough of this and summons King Awgwa and his followers to come and face him. King Awgwa defies the Great Ak's demand that he stop interfering with Claus's efforts and declares war on the Immortals. Later, the Great Ak and some other Immortals face off against the Awgwas and some monstrous friends that they brought. The monsters attack the Immortals, but the Immortals defeat them. The Immortals then charge toward the Awgwas, who flee in fear. Afterwards, the Great Ak informs Claus that he can resume his toy delivering without fear of interference, because the Awgwas
> have perished.
Claus and his friends prepare a sleigh to deliver toys to the village, but it is too heavy for them to pull. Peter Knook comes up with the idea of hitching reindeer from the Forest to the sleigh in order to pull it. Claus travels across the valley in his sleigh along with Tingler and Shiegra. The sleigh makes multiple large leaps which Tingler says is like flying. Claus claims that he now knows why the valley is named the way it is, as he laughs in a "ho ho ho" manner. When he makes his first stop, he finds that the door of the house is locked since it is night, so he enters through the chimney. Once inside, he finds that the children's stockings were hung by the fireplace to dry, so he decides to put small toys in them while placing larger toys elsewhere. After Claus leaves and the family wakes up, they refer to him as "Saint Claus" or "Santa Claus".
Once Claus returns, Peter Knook informs him that he can only use the reindeer once a year on Christmas Eve. Christmas Eve is only ten days away, so he will not have time to make enough toys. In order for Claus to have enough gifts, Peter Knook finds and retrieves the toys stolen by the Awgwas. Claus sets out on his first of many Christmas Eve sleigh rides.
As Claus nears the end of his life, he suggests that his friends remember him by decorating a tree every year. After hearing about Claus's life and good deeds, the council unanimously votes to give him the Mantle of Immortality. Having become known as "Santa Claus", he delivers gifts to children every Christmas Eve.
