Mary Blair's watercolors tell the story of a Latin American Christmas tradition for children.
This is the story of a group of Mexican children who celebrated Christmas by re-enacting the journey of Mary, the mother of Jesus and Saint Joseph searching for room at the inn on the nine days before Christmas. "Posada" meant "inn", or "shelter", and their parents told them "no posada" at different houses until they came to one where they were offered shelter in a stable. This leads to festivities including the breaking of the piñata, which in turn leads to Donald Duck trying to break his piñata as well.
- It is to note that in the English version of the film, the song based on the tradition is heard instrumentally while Panchito narrates the segment. In the Spanish version of the film, most of Panchito's narration is replaced by a chorus singing Las Posadas, making his narration short.
- However, in the European Spanish version of the VHS Walt Disney's Favourite Christmas Stories, the song is replaced by Panchito narrating the segment, just like in the original English version.