Bud is upset that Lou is late, and hears about the relatives who kept him busy. Lou tells about party favors and arrangements he has lined up. There is confusion over the kind of tree he bought. Is it a fir, or a pine? What kind of bark, or coat does it have? Connie Haines sings, the Trolley Song.
Having trouble with decorations, Lou tells about using spaghetti for tinsel. In the department store, a clerk with a stiff accent gives Lou something to joke about. When his girlfriend, Lena shows up, he may be on the outs with her. Mrs Niles is also likely to take offense, and not come to the party. Mellonhead talks to the guys, and nothing Lou says can make the man happy.
Later, the clock strikes midnight, and nobody has showed up at Lou’s party. Feeling so bad, Lou thinks Santa will turn his back on him. He recounts a story from his childhood, and how he misbehaved. Santa has gifts for the good kids like Bud, and Ken Niles, but Lou’s pranks have found him out. Will the bad little boy have yet another sad Christmas? All his friends surprise him at the last moment.