The film begins at the North Pole with Santa Claus (George Wendt) and his dog, Santa Paws (Tom Bosley), taking a look at the magical Christmas Icicle, which is melting because of nobody believing in Christmas anymore and if it continues to melt, Christmas will be gone forever.
Puppy Paws (Zachary Gordon) is Santa Paws' fun-loving son. He gets tired of the North Pole and finds Budderball on Santa's naughty list for eating the Thanksgiving turkey and figures he's just the dog to show him how to be an ordinary puppy.
The film then moves forward to the Buddies (Field Cate, Liliana Mumy, Josh Flitter, Skyler Gisondo, Ty Panitz) in Fernfield, who also don't have any Christmas spirit. They believe that their father is Santa Paws and that the naughty list is a way to scare them to behave. However, Sniffer (Tim Conway) replies that Christmas is about giving and a holiday they must learn to respect.
The Christmas Icicle makes a big crack and shuts off the power at the North Pole and makes the reindeer weak and powerless (earlier before he left the North Pole, Puppy Paws stares at the icicle stating "I wish Christmas would just disappear" causing it to crack).
Puppy Paws makes it to Fernfield to find Budderball in his home and Budderball himself introduces Puppy Paws to his siblings and Puppy Paws causes trouble to each of the Buddies: Budderball gets framed for eating the gingerbread cookies as he tries to get back on the nice list, B-Dawg gets beaten by Puppy Paws at dancing who even breaks a vase, MudBud teaches Puppy Paws to roll in the dirt, and unaware not to shake dirt out of his fur in the living room, he makes holiday shapes of the dirt spots causing Mudbud to wear a cover-up coat for the rest of the day, RoseBud gets an extreme Christmas makeover, and Buddha's meditation statue gets turned into a snowman as Puppy Paws explains that the snowman is "what citizens of the North Pole medidate in front of".
Therefore, due to the incidents, the Buddies want Puppy Paws to leave. But they learn that he isn't hurting them as they are hurting themselves and decide to treat him with compassion. Suddenly, Puppy Paws gets dognapped by a dog catcher named Stan Cruge (Christopher Lloyd) and takes him to the pound. There, Puppy Paws meets a puppy named Tiny (Kaitlyn Maher) who is wishing for a Christmas miracle and sings a song about miracles, which teaches Puppy Paws himself about the true meaning of Christmas.
The Buddies, along with an elf dog named Eddy (Richard Kind), have come to the rescue. With Tiny and Eddy still in the pound, the elf dog speaks to Stan that he knows the dog catcher always wanted a puppy for Christmas, but his mother was allergic to dogs and never got one, which made Stan hate Christmas and become a dog catcher. Eddy becomes free from the pound and changes Stan.
With help from an elf named Eli (Danny Woodburn), Christmas spirit returns, the Christmas Icicle stops melting, and the North Pole is back in business, with Puppy Paws and the Buddies making it to the North Pole. The reindeer are not able to fly, and Puppy Paws and the Buddies volunteer to save Christmas ( it is revealed the Buddies remembered what Shasta taught them). A changed Mr. Cruge brings Tiny over to the child who has been asking for a puppy as a Christmas present and Tiny herself says her goodbye to the Buddies and Puppy Paws. After their last delivery, Santa Claus and Santa Paws arrive in Fernfield and Santa makes the Buddies (including Budderball) on top of the nice list, Puppy Paws becomes part of Santa's family, and the Buddies say farewell.
Stan gets invited to dinner with Tiny's new family and the film ends with the entire town, led by Stan, singing "Silent Night" in front of Fernfield's Christmas Tree as celebrating the holidays.
- George Wendt as Santa Claus
- Christopher Lloyd as Stan Cruge
- Danny Woodburn as Eli
- Quinn Lord as Pete
- Ryan Grantham as Sam
- Andrew Astor as Mikey
- Sophia Ludwig as Alice
- Gig Morton as Billy
- Craig Anton as Bob
- Michael Teigen as Sheriff Dan
- Zachary Gordon as Puppy Paws, Santa Paw's son
- Tom Bosley as Santa Paws, a Great Pyrenees
- Tim Conway as Deputy Sniffer
- Josh Flitter as Budderball
- Liliana Mumy as RoseBud
- Ty Panitz as MudBud (Jonathan Morgan Heit when singing)
- Field Cate as Buddha
- Skyler Gisondo as B-Dawg
- Richard Kind as Eddy, a Jack Russell Terrier
- Kaitlyn Maher as Tiny, a Yorkshire Terrier
- Chris Coppola as Comet, a Reindeer