The crew travels to a lodge in the Catskills, where they endure the observational humor of Jerry Seinfeld’s head. Shortly thereafter, the Professor suggests that some skiing may help everyone forget the unfunny routine. The crewmembers hop aboard ski lift cars held aloft by tiny jet engines. Upon disembarking, Fry and Leela ski down the mountain, which, it turns out, is equipped with computer-controlled trees that fold to the ground to prevent accidental collisions.
Bender, meanwhile, navigates the trails using his snowboard. But when he ventures off the marked trails, he sails off a cliff and plummets into a frozen pond. Afterward, the crew gathers near a fireplace area at the lodge. The crewmembers react with confusion when Fry mentions the Christmas holiday. They tell him it is now pronounced Xmas ("ex-mas"). With a wistful sigh, Fry laments that the upcoming Xmas will be his first ever away from home. Leela attempts to lift his spirits by suggesting that she and the others help Fry cut down an Xmas tree. But to Fry’s disappointment, pine trees have been extinct for eight hundred years.
Instead, Leela cuts down a palm tree. When the crew returns to the Planet Express offices with the tree, Hermes hands out envelopes containing Xmas cards. Everyone, with the exception of Leela, receives a card. Later, a depressed Fry laments that he is the loneliest person on Earth. But when he turns to Leela for sympathy, she cries and runs out the door. Amy and the Professor explain to Fry that Leela is not only an orphan, she is also the only one of her species in the known universe. Fry feels ashamed for having so selfishly been complained about his own lot in life when Leela is truly all alone.
He decides there’s only one thing to do: find Leela the perfect Xmas present. But as Fry prepares to leave the office, the other staffers warn him to return before sundown, as staying out on Xmas Eve is very dangerous. The Professor explains that in the year 2801, a company constructed a robotic Santa that was programmed to determine who had been naughty and who had been nice—and distribute presents accordingly. But something went horribly awry and the robot’s standards were set too high. Ever since, the rogue robot has been decapitating its victims.
Despite the danger, Fry ventures out to find Leela a present. Meanwhile, Bender views a news report about a shelter for down-and-out robots. Bender tells his colleagues that he has decided to volunteer his time at the shelter. But when he shows up, he is dressed as a down-and-out robot and asks to be pointed in the direction of the free booze.
After guzzling down bowl after bowl of alcohol, Bender encounters Tinny Tim, a sickly- ooking robot waif. Bender feels terribly selfish and serves the robot a bowl of cognac. After searching high and low, Fry eventually purchases Leela a five hundred dollar parrot. But the bird bites Fry’s nose and escapes from its cage. Fry climbs a tall digital clock tower and attempts to retrieve the bird. As the numbers on the digital clock display change, Fry loses his grip and plummets toward certain death. Fortunately, Leela reaches out a window and saves him.
Later, as the pair walk down a street, Leela takes Fry’s hand in hers and wishes him a "Merry Xmas." Suddenly, a terrifying 8-foot Robot Santa steps into view and, in a deep scary voice, roars "ho ho ho!" The Robot Santa determines that Fry and Leela have been naughty for disregarding each other’s feelings. He then pulls out a machine gun and begins blasting away. Fry and Leela run for cover as Robot Santa swoops down from the sky in his rocket-sled, from which he lobs grenades. They take cover in an archway, in which hangs some mistletoe. The pair lock eyes…but moments later, Robot Santa fires a missile from a rocket launcher.
Luckily, Fry’s escaped parrot flies into its path, and the missile explodes in the air. Fry and Leela run off,and eventually encounter Bender and his fellow robots. The group makes its way back to the Planet Express offices. Santa and his reindeer access the offices through the chimney. As Santa's belly jiggles like a bowl full of nitroglycerin, one of the reindeer’s noses blinks like a bomb timer.
The staff springs into action, and using the Xmas tree like a battering ram, they stuff Santa and the reindeer back into the fireplace. A chimney cover is then slid into place. Seconds later,
there is a tremendous explosion, and Santa and his sleigh rocket into the night sky. Later, Fry declares that even though he is surrounded by robots and monsters and the elderly, he has never felt more at home.