Just before Christmas, Alisha and her brother Miguel went out looking for a Christmas tree for their family. After the pair had gotten lost looking for a tree, they ran into Orko. As it turned out, Orko had accidentally launched Man-At-Arms' Sky Spy shuttle and after using a magic spell to try and land it, he instead caused the shuttle to crash-land on Earth. Orko then brought Alisha and her brother into the crashed Sky Spy, where they explained Christmas to him.
Eventually, Man-At-Arms got his Transport Beam working. He transported Orko and the Sky Spy back to Eternia, but Alisha, Miguel, and their Christmas tree are brought along with them. After Miguel explained where they came from, she and her brother were told that it may take a few days for the crystal to recharge before they could return to Earth, and they were quite distressed that they might miss Christmas. Queen Marlena, sympathizing with Alisha, decided to combine Adam and Adora's birthday party into a Christmas party.
Meanwhile, Skeletor and Hordak were summoned by their supreme master, Horde Prime. He ordered them to go capture the two Earth children, saying that whoever brought them to him would be well-rewarded.
Skeletor managed to capture Alisha and Miguel first, taking a mechanical puppy named Relay along with them. However, Hordak caught up to him and shot down Skeletor's War-Sled, forcing him to crash-land. Skeletor was then forced to bring Alisha and Miguel to Horde Prime on foot. During the trek, he felt a sudden urge of kindness that resulted in him fitting Alisha and Miguel with winter jackets to protect them from the cold, and Alisha and Miguel together were able to convince him to bring Relay along so he wouldn't freeze. Alisha later explained to Skeletor about Christmas. Horde Prime eventually arrived in his ship just as He-Man and She-Ra caught up, and Hordak arrived as well. After being injured, Alisha and Miguel managed to convince Skeletor to save them from their would-be captives by shooting down Horde Prime's ship.
Alisha thanked Skeletor for saving them, and Skeletor was relieved to learn that he would only be overtaken by Christmas spirit once a year.
Back at the palace, Alisha and Miguel celebrated their Christmas party. Adam, dressed as Santa Claus, gave Miguel and Alisha flying belts. Man-At-Arms then used the Transport Beam to send Alisha and Miguel back home, where they were welcomed back by their parents.