Unholy Night is the Christmas episode of American Horror Story: Asylum.
A boy tells a bell-ringing Santa Claus that he wants a coonskin cap for Christmas. The Santa packs up for the night and is approached by a man who tells him not to disappoint the boy. When Santa gets short with the man, he is shot. The shooter, dressed in the bloody costume, enters a residence and kills Susie Lancaster's parents when they cause him to lose his "Christmas spirit." He then goes on an unseen killing spree.
The killer is known as Leigh Emerson and becomes a patient at Briarcliff. Sister Jude keeps him shackled, even for a group picture with the others, as she feels he is a danger both inside and outside the asylum. He proves her correct as he bites off an orderly's nose on Christmas. Jude sends him to solitary confinement and canes him in her office over the course of his stay.
Sister Mary Eunice tries to be festive with the patients in the dayroom, but claims Jude has thrown away all the tree ornaments. Mary Eunice tells the patients to be a creative as she improvises and decorates the tree with their belongings – dentures and hair clippings. In the laboratory, Frank prays over Grace's body and tells Dr. Arden they should report the recent kitchen events to the police. Arden asks if he wants them to know Frank killed Grace, who was unarmed, but Frank seems not to care.
Jude sneaks into her office and holds a straight razor to Mary Eunice's throat, threatening to end the possession. Dr. Arden and Mary Eunice's telekinesis breaks Jude's hold and he is asked to escort Jude out of the building. He mentions Frank's intentions to Mary Eunice, who claims she will take care of it. She takes a Santa suit to Leigh, intent on lifting his spirits. She recites his maniacal history, which began when he was arrested for shoplifting and raped in jail. She gives him the choice of being the victim or the victor.
Arden brings Mary Eunice a present of ruby earrings. She giddily takes them, even after he tells her of the jewelry's history. He took them from the feces of a wealthy "Jewess" in concentration camp who tried to hide them by ingesting them and died from it. He hoped the former Mary Eunice would be appalled at the story, but the current Mary Eunice is not. She calls him "pathetic" and warns that even God cannot help him, if he's not with her.
Lana worries that Mary Eunice hasn't done anything about Dr. Thredson, but she discovers Kit has returned to the asylum. He has been drugged and dreams of a pregnant Alma who morphs into a pregnant Grace. He apologizes for getting her killed and Lana wakes him from the dream. She explains to him that Thredson is the killer and she will prove Kit's innocence. He wants to help her but is too drugged to help at the moment.
Jude talks to Mother Superior about the country turning from God to commercialism at Christmas time. She thinks the Devil is the reason and vows to not let Mary Eunice be the next convert. Their meeting is interrupted with news that Dr. Arden wishes to meet with Jude. He admits to her that she was correct about Mary Eunice and seeks Jude's help. He vows loyalty to her if she can return Mary Eunice's innocence. He later lets Jude into the asylum through the kitchen entrance and she tells him she must speak to Mary Eunice alone in the office.
Monsignor Howard delivers a pointy handcrafted star from the Boston archdiocese to put on the asylum tree. He commends Mary Eunice for allowing Leigh to have a chance at redemption, by allowing him to be unshackled and dressed as Santa. Leigh then knocks Frank down, slices his face with the star, and prepares to stab him with it, before orderlies tackle him. Arden arrives to tell Mary Eunice she has "pressing business" in the office.
Lana finds a phone but Thredson stops her while she is dialing. He tells her she has forced him to "kill" Bloody Face and destroy all evidence. He had planned on letting her talk to the police, as it would be the word of a mental patient against the word of a psychiatrist. She has, however, betrayed his trust and he prepares to strangle her with the phone wire. Kit enters with a fire extinguisher to knock Thredson unconscious. Lana wishes the doctor dead, but Kit needs him alive to show who the real killer is. They stow him in a storage closet, where Lana promises Thredson she will, one day, bury him.
Frank puts Leigh back in his solitary cell. Mary Eunice 'predicts' that Frank has had trouble with Leigh and slices Frank's throat with the straight razor. She feigns worrying about a rampage as Leigh maniacally laughs. In the office, Jude prays for guidance and strength. The door opens and she sees Leigh enter. When asked, he says he is there to open his "present." Mary Eunice locks the door from the outside and Arden affirms his loyalty to her. Arden leaves to take Grace's body in a cart down the death chute, so the Raspers can dispose of her. Along the way, he is stunned by a bright light and a deafening sound. He regains his senses to find an empty cart and missing Grace. In the office, Leigh reminds Jude of her cruelty to him by caning her across the desk. He intends on raping her but she stabs him in the neck with a letter opener.