When Santa Claus receives a gift from Mr. Hucklebuckle in New York City, he is introduced to a magical talking puppy named Paws. In an effort to rejuvenate the Christmas spirit among the city's children, Santa and Paws set off for New York. However, upon arrival, Santa is hit by a car and loses his memory. Separated from Santa, Paws begins a journey to find him, meeting a group of orphans who are dealing with their own struggles in a strict foster home run by the cold-hearted Ms. Stout. Paws bonds with a young girl named Quinn and her friend Will, who help in the search for Santa.

As the story progresses, the orphans and Paws face numerous challenges but become determined to restore the lost Christmas spirit. Meanwhile, Santa slowly regains his memory but is unaware of how he arrived in New York. The children, inspired by the magic and innocence of Paws, find renewed hope and unity. With their collective efforts, they aim to bring back the cheer of the holiday season.