Despite Francine's warning, Stan gives Steve a gun for Christmas; Steve accidentally shoots Santa.

When Steve starts acting like a spoiled brat during the holidays, Stan takes him to see his incarcerated Grandpa Jack, who tells him the story of how he caught Minstrel Krampus, a legendary demon who punishes naughty children on Christmas. Stan decides that releasing Krampus is the only way to straighten out Steve's attitude. But when Krampus kidnaps Steve, it's up to Stan and Roger to get him back. Meanwhile, Hayley gets a job at the airport, but quickly realizes that she might not be cut out for customer service.

The Smith family must rescue Steve after he is kidnapped and taken to the North Pole. There, Santa Claus is using children to mine for precious stones that he needs to perform an ancient ritual.

Roger turns his attention to Steve's friend Snot who teaches him about Hanukkah, prompting him to convert to Judaism. Roger then decides to make Hanukkah more popular than Christmas by stealing Santa's powers, and becoming Schmanta Claus.

When Steve gives the family better Christmas gifts than Stan, Stan goes to great lengths to regain his title of "King of Presents."