Jesse has been complaining all day that people have no Christmas spirit this year. Michelle buys a plastic tie with a cup holder on it as a Christmas gift for Danny, and when she overhears Danny saying insulting things about plastic ties with cup holders on them, she decides to exchange it for a different gift for Danny. She and Jesse go to the novelty store she got the tie from, but the grouchy owner, Mr. Dreghorn (Mickey Rooney), refuses to exchange the gift. When Jesse tries to do it himself, Mr. Dreghorn traps them inside the store and hits the silent alarm to alert the police, because he believes that Jesse and Michelle are thieves. Jesse and Michelle get to the root of Mr. Dreghorn's anger: he hasn't seen his daughter and her family in years. Mr. Dreghorn's daughter and her family moved to Oregon, and Mr. Dreghorn stayed behind to run the store. Jesse admits to Michelle that even though he complained about people not having any Christmas spirit, Jesse was the one who didn't have any Christmas spirit, but he feels like he's getting it back. Jesse and Michelle invite Mr. Dreghorn to the house for Christmas dinner, where Jesse gets Mr. Dreghorn to use the cordless phone to call his son, which brings about a happy reconciliation. Jesse then admits to Michelle that even though he complained about others not having any Christmas spirit, it was Jesse himself who didn't have any of the Christmas spirit.
Meanwhile, Nicky and Alex are afraid of Santa Claus because they saw D.J. and Stephanie struggling to help Joey put his Santa suit on, and Nicky and Alex thought Santa was hurting D.J. and Stephanie.