When Santa Claus (Richard Riehle) travels to New York City and gets hit by a cab, loses his memory and the crystal that keeps him eternal is stolen, it's up to his new friend, his puppy named Paws (Zachary Gordon) to save him. Meanwhile, a young orphan named Quinn (Kaitlyn Maher) arrives at a foster home run by a strict and no-nonsense woman named Ms. Stout (Wendi McLendon-Covey) who does not approve of anything that children love: toys, Christmas decorations, singing, and even pets. She has a furnace which she uses to burn all the toys she confiscates from the girls who rightfully own them. Despite the strict rules she has to respect while staying at the foster home, Quinn eventually befriends the girls, including Janie (G. Hannelius) and Willamina "Will" (Madison Pettis). In order to save Christmas, Eli (Danny Woodburn) and Eddy (Richard Kind) the uncanny elf dog have to go to New York City to save Santa and Paws. But when Santa (Bud) is in the hospital, it takes the help of Quinn and Will to save Santa. When Kate and James take Bud from the hospital, Paws tells Eli to put his crystal next to Santa, but then he wakes up to find that Paws is a stuffed animal. They rush back to the North Pole and Paws turns into a full-grown dog named Santa Paws (Mitchel Musso) and Christmas is back on. Ms. Stout is fired from taking care of the orphan girls at the foster home, much to the excitement of the girls, and Will and Quinn are both adopted by James and Kate Hucklebuckle.