While Polly is singing “Jingle Bells” on Shipwreck’s shoulder, Shipwreck grabs the parrot’s beak and tells him to be quiet or there is a feather duster in his future. After Dusty tries to lighten the mood in the AWE Striker, Cover Girl happily chimes in that the Joes have collected enough toys for their toy drive to beat last year’s contribution to a local children’s hospital.

Wild Weasel attacks the Joes in a Rattler and Cover Girl drives onto a road surrounded by rocky cliffs while avoiding the Rattler’s shots. The Joes fire back at the Cobra plane, however, Cover Girl is forced to squeal to a stop in order to avoid one of the shots. And the moment she stops, Firefly appears from behind a door built in the rock quarry and drops toys into the Joes’ G.I.Joe Happy Holiday Wagon. Wild Weasel receives Firefly’s signal indicating his part of the mission has been accomplished and after Wild Weasel radioing Cobra headquarters that the mission has ended he flies a loop in the air and zooms away. Unsure why the Cobra plane left the Joes when they could have been pinned down until next Christmas, Cover Girl offers an apathetic response and tells the others, “Let’s not look a gift horse in the mouth.” And inside the Joes’ toy trailer, a rocking horse’s eyes begin to blink.

Shipwreck, Dusty and Cover Girl arrive at Joe headquarters under gentle snowfall and Blowtorch removes the rocking horse from the trailer and tells Shipwreck and Roadblock that he always wanted the toy since he has a boy. Cover Girl walks with Duke in the snow and explains that if Cobra launched a full-scale assault, the base could be vulnerable since most of the Joes are on holiday leave. Flipping a switch, Duke tells Cover Girl that the base is safe as long as they have the automatic defense grid activated, and a fence composed of bright red lasers surrounds the base.

The Joes sit down for a Christmas dinner prepared by Roadblock, however, Mutt excuses himself from the table after Junkyard receives a turkey leg from Duke, but Junkyard drops his meal and follows Mutt out of the room. Tripwire asks Duke what's wrong with Mutt, and Duke can only guess "holiday blues." While walking with Junkyard, Mutt explains to his best friend that he always finds himself slightly depressed during the winter holidays because his parents always made a big fuss over the holidays. As a result, Mutt was never able to experience the little things that make the holidays memorable and enjoyable, like trimming the tree, hanging his own stocking by the fireplace or wrapping presents.

But Mutt’s thoughts are cut short as he hears a noise in the Joes’ toy depot. The rocking horse moves forward and several miniature Cobra agents and Major Bludd are ejected from the saddle of the horse and parachute to the ground. Miniature SNAKEs burst out of teddy bears and Rattlers, FANGs and CLAWs fly out of drums as Mutt sounds the alarm before falling to the floor unconscious due to the sleeping gas from Cobra’s aerial weapons.

As the Joes rush outside, the Baroness flies to the control panel for the defense grid and destroys it with a blast from her Rattler. With the defense grid down, Firefly runs toward the wall of the Joes’ headquarters, scales it to the top and shoots the Cobra forces who are approaching the Joes with a gun that enlarges the Cobra personnel and vehicles to full-size. Roadblock shoots at the wall under Firefly and causes the Cobra saboteur to drop the gun. The Joes are surrounded and Cobra Commander walks out of the toy bunker and tells the Joes, "Seasons greetings." And he then laughs with an insane, raspy laugh.