Buddy Hobbs, a young orphan child, mistakenly crawls into Santa Claus' bag of gifts and is transported back to the North Pole. After discovering the baby, Santa and his elves decide to raise the child as an elf. Years later, Buddy finds out that he's actually a human being and, at Santa's prompting, heads off to New York City in search of his father, Walter Hobbs. Faced with the harsh reality that Walter is on the naughty list and his son, Michael, doesn't even believe in Santa, Buddy is determined to win over his birth family and help New York City remember the true meaning of Christmas.