After witnessing his parents' brutal murder by a man dressed as Santa Claus, young Billy is left traumatized and is placed in an orphanage. The stringent Mother Superior subjects him to harsh discipline, reinforcing his fear and confusion about punishment and the concept of Santa Claus. Despite the efforts of some more compassionate staff members, Billy's deep-seated trauma remains unresolved, leaving a mark on his psyche that only grows deeper with age.

Years later, now a teenager, Billy secures a job at a toy store during the holiday season. His co-workers and the festive atmosphere initially uplift his spirits, but as Christmas approaches, his past horrors resurface. Triggered by a series of distressing events and memories linked to his parents' murder, Billy's suppressed fears and rage violently re-emerge, setting off a chain reaction of terror. His psychological unraveling leads to unforeseen and shocking consequences.