Just before Christmas, Miguel and his sister Alisha 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 Miguel and his sister 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 Miguel, Alisha, and their Christmas tree were brought along with them. After Miguel explained where they came from, he and his sister are 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 Miguel, decides 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 Miguel and Alisha, 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 Miguel and Alisha to Horde Prime on foot. During the trek, he felt a sudden urge of kindness that results in him fitting Miguel and Alisha with winter jackets to protect them from the cold, and Miguel and Alisha together were able to convince him to bring Relay along so he wouldn't freeze. Miguel later explained to Skeletor about Christmas. Horde Prime eventually arrived in his ship just as He-Man and She-Ra caught up, as Hordak arrived as well. After being injured, Miguel and Alisha managed to convince Skeletor to save them from their would-be captives by shooting down Horde Prime's ship.
Miguel thanked Skeletor for saving them, and Skeletor was relieved to learn that he will only be overtaken by Christmas spirit once a year.
Back at the palace, Miguel and Alisha 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 Miguel and Alisha back home, where they were welcomed back by their parents.