She first started as serious, hardworking, and the school principal. She was first seen when she caught Scott Calvin's son, Charlie, for defacing the walls of the gymnasium from the skylight.
After a few failed dates, Scott finds himself falling for Carol. He accompanies her in a sleigh to her school faculty Christmas party, which turns out to be dull and boring.
Using a little of his Christmas magic, he livens it up by presenting everyone with their childhood dream gifts (much like he did for Laura and Neil in the first film).
He makes a special presentation to Carol, and, with his last remnant of magic, wins her over and they kiss passionately.
However, when Scott explains his reason for dating her as Santa Claus, Carol balks, believing that he is mocking her childhood (where she was teased for believing in Santa) until Charlie manages to convince her by showing her his magic snow globe.
Later on, Toy Santa wastes no time in tying him up with Curtis, but Charlie and a now-believing Carol spring him free by summoning the Tooth Fairy to fly them thereafter Lucy loses a tooth.
He goes after Toy Santa, who has already left with the sleigh, riding Chet, a reindeer-in-training, and they both battle over the reindeer. With an army of elves, Carol, Bernard, Charlie, and Curtis lead a snowball war to overthrow the toy soldiers.
During the battle, Toy Santa and Scott accidentally cause the sleigh to crash back into the village (as well as crashing on the rest of the toy soldiers). Toy Santa is forcibly restrained by the elves and is reduced to his normal six-inch height.
Scott marries Carol in a ceremony presided over by Mother Nature herself.
He transforms back into Santa, and Christmas proceeds as it always has and he and Carol have a three-month honeymoon to go on the next day.
In addition, Charlie reveals the truth to Lucy that he is the real Santa Claus.