It was Christmas Eve on Sesame Street and Shaggy, Daphne, and Scooby were paid by Starlight Music for their annual Children's Christmas sleep in. Velma and her sister Madelyn were in Florida for Christmas, while Fred was in Las Vegas for a Christmas basketball game. The participants included the girls from Starlight House, The Celestian Alliance, and Phineas and The Ferb-Tones.

"Okay children," Daphne announced, "Your all here to see what Christmas named life in NYC and spread the Christmas spirit."

"And don't worry about the ponies from Equestria," Shaggy continued, "Everyone on Sesame Street is aware on their existence."

As the kids were enjoying Sesame Street, they saw a red monster, it was Elmo.

"Hi, Elmo" Lilo shouted to him.

"Hi Lilo," Elmo greeted back, "Alan just made these cookies for Santa."

"That looks yummy." Pinkie Pie shouted, "Your should see my cookies."

There she showed her cookies that were candy canes with pink and red frosting on it. When they got inside to the apartment lobby, they saw a little girl who's 4 years old. She had red hair in pigtails, a green dress, and white mary janes who's crying. Lilo decided to comfort her, "What's wrong little girl?" Lilo asked.

"My mommy is in the hospital and it's my first Christmas without her." said the girl.

"What's your name?" said Betty Ann.

"I'm, Natalie Rankin"." The girl said.

After Lilo and her friends introduced herself and her friends, an elderly lady with short gray hair, glasses, a green shirt, a red pair of khakis, and red high heels. "Granny!" Natalie said as she saw the woman.

"Natalie, it's almost time for dinner." said the old lady.

Kristen recognizes the woman and said, "Holly Muller" the singer?"

"That's me," Holly replied, "I was a famous singer back in the 60s."

"You're a legend, I listen to your music," Kristen exclaimed, "What's going on with Natalie's mom?"

"My daughter, "Charity" is in the hospital with a rare disease," Holly explained, "And with nowhere to go, she and Mistletoe came to me?"

"Who's, Mistletoe?" David asked.

"My pet cat, she kept my company while Grandma was visiting mommy in the hospital," Natalie answered, "Along with Granny's fiancé and his friends, he taught me how to dance."

"Don't you have a dad?" Frank asked.

"Not anymore, he died when I was still a baby." Natalie sadly answered, "I don't remember him."

Then 3 familiar elderly men came in it was Cecil, Gus, Reginald. Holly kissed Cecil, revealing that he's Holly's fiancé.

"Hey kids, how's Chicago?" Cecil asked.

"It's doing great," Gary replied.

"Not again!" Gus whined, "I don't wanna play Space Probe with that pipsqueak/

"Pipsqueak?" Tucker growled.

Instead of playing Space Probe, he cooled off since it's Christmas and hugged Reginald.

Later at Elmo's apartment, he tiredly placed the cookies on the table near the chimney, but the cookies fell off onto the ground, "Home at last." Elmo said as he fainted."

"Eww!" Rarity shouted, "Those cookies are on the floor."

"Laughter!" Betty Ann shouted.

There Betty Ann assembled all the cookies, cleaned them off, and placed them back on the plate. Gary asked Daphne if the kids could spend the night at Elmo's apartment and Daphne said, "Yes".

Later they were watching the Snooper Dog and The Clue Crew Christmas Special where they fell asleep. Later at midnight, they heard someone stuck in the chimney. Elmo decided to help him out. The others decided to help Elmo too. As they helped the man out, it was Santa Claus. "Santa!" they all shouted.

"Of course kids," Santa answered.

As Santa was talking about on how long he gets down the chimney, Lilo saw a glimpse of Natalie.

Santa was going through his sack when he got out a cute looking reindeer named, "Lightning". He was stowing away because he wants to learn how do the 9 reindeer do it. In reward for Elmo for saving him from getting stuck, he decided to give him 2 option of presents. A pink bear or a magical snow globe. Elmo

"Say your wish, shake it and say, "Blitzen"," Santa explained.

Elmo wished for a glass of water because he was thirsty, Santa grabbed some cookies and he and Lightning headed off for their sleigh saying, "Merry Christmas".

Outside the apartment, Natalie was talking to her white munchkin cat, "Mistletoe", she had a green collar and mistletoe tag. "Did you see that Mistletoe?" asked Natalie to her cat, "It's Santa, he's real. we should go back to sleep before Granny finds out."

Then the headed off for their apartment.