Santa, who has been bitten by the Fame Bug, is now magically split from Claus, his conscience and Christmas Spirit. 'Fun, Fun, Fun' seams to be Santa's new purpose in life - which Claus, of course, strongly objects to.
Into this volatile situation strides Vladimir Gragonoff - one of the richest men on earth - who convinces Santa to let him and his package delivery company take over the delivery of presents on Christmas. Vladimir has, of course, far greater plans than that: he wants nothing less than to ruin Christmas for everyone. His motive is revenge against Santa - who failed to give him all the presents he demanded as a child.
At the heart of the story, though, is Ellie, an eight-year-old girl. She loves Christmas and knows 'everything there is to know' about it. Her father, on the other hand, wants nothing to do with it for a very personal reason. Claus, who has 'walked out' on Santa at the North Pole, now enters into their lives. He has been sent to live in their apartment house by G - Santa's long-suffering Fairy-secretary. G is also the head of a secret organization whose purpose is to protect Christmas.
But a short time after arriving Claus is kidnapped by Vladimir's evil sprites. These were conjured by none other than Vladimir - who now knows he must keep Santa and Claus apart if his plans are to succeed. Ellie and her father, then, with the help of Aubrey Gnash, an A-plus ultra-gnome secret agent, set out to rescue Claus - and Christmas.