With another X-Mas bearing down on Earth, the Planet Express crew prepares for Santa's imminent arrival. However, Professor Farnsworth sends Fry, Leela and Bender to deliver letters to Santa on Neptune.
Arriving there, Fry and Leela are distraught over the conditions of the planets Neptunians, who have been left poor and hungry since Santa shuttered the toy factory, the reason being that since Santa deems everyone to be naughty, there's no need to make toys.
Hoping to end Santa's tyranny, our three heroes sneak into Santa's ice fortress, where Leela attempts to destroy Santa with a 'logical paradox.' When this backfires, the gang attempts to escape, but Santa latches onto their ship, keeping it from flying away. The ships engines cause Santa to sink into the melted ice, and as his grip loosens, the ship flies away, with the ice trapping the tyrant.
With the need to still have X-Mas, Bender is chosen to deliver presents now that Santa has been incapacitated. However, due to Santa's tyrannical reputation, everyone assaults or manhandles Bender, until he is eventually captured and put on trial.