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Punky desperately wants to give Henry a pocket watch for Christmas. When rich businessman Horatio Lake (Richard Kline) is robbed of a briefcase containing valuables, Punky solves the robbery and figures out that it was Mr. Lake's son, Jerry (Donnie Jeffcoat), who took the briefcase. Punky tells Mr. Lake what went on—Jerry figured that he would take the briefcase and lie low with it for a few days, and then when the police gave up, Jerry would say that he found the briefcase. That way, he would be the hero, and maybe Mr. Lake would pay more attention to him for a change. Jerry wanted attention from his father after years of being pretty much ignored by him. Mr. Lake wonders how he could've let things get to a point where Jerry thought he had to do what he did and realizes his mistake of ignoring Jerry all these years, vowing not to let that mistake happen again. As a reward to Punky for solving the robbery and helping Jerry and Mr. Lake become closer than ever, Mr. Lake gives Punky a pocket watch, and Punky gives it to Henry as a Christmas gift.