Watson talks to announcer, Harry Bartell, about his Christmas plans, then relates a Christmas tale where he played Santa to impress the nieces of their housekeeper, Mrs Hudson. Taking the bag of presents to distribute, Holmes is asked to attend a party in disguise. Agreeing to go to Whitticomb’s party, Sherlock wears his own Santa suit.
Distributing his gifts after a brush with the cult, Disciples of the Octagonal Square, Watson discovers a problem. Meanwhile, Holmes has his own difficulties with the mystery he has afoot. What does his have to do with the Disciples of the Octagonal Square? What kind of gifts are cuff links and jewelry for little kids? Pretty, but not too practical as toys.
Santa Clauses seem to be running rampant, but mixed up presents may mean danger for an unwitting Watson if Holmes can’t get to him in time. Moriarty seldom leaves things to chance, and Holmes takes a choir of caroling cops to sing in the streets. Crossed up crooks are captured, jewels are swapped for toys, and all have a Merry and safe Christmas. Well… all but the crooks.