The Curious visits a department store called Peltzer's to look at the Christmas display.
Whilst in the store, Lawrence is unnerved by a creepy animatronic Santa that says it is watching him. The animatronic is obviously malfunctioning, and Lawrence plays with its wires, causing it to overheat. His mother asks him to go to another floor of the store and post a present for his grandmother - a necklace that contains his late grandfather's ashes. Lawrence accidentally puts the present down and it gets carried away and taken to the Santa display. He asks for it back, but the employee in charge thinks he's causing trouble and bans him from the display. The Santa animatronic asks if he's been naughty or nice; Lawrence replies that he's naughty, and the animatronic winks. Lawrence meets up with his best friend Mikey, who is to sleep over whilst Mikey's mother works late at the store. Mikey, concerned about risking his mother's job, objects to Lawrence's plan to sneak into the Santa display to get the present back.
The boys hide out until the store closes and then Lawrence retrieves the present. But they are attacked by the animatronic Santa, "Splinta Claws"; which can move by itself even when unplugged. Lawrence gets cornered by Splinta Claws, but it identifies him as a "naughty child" and ignores him - chasing after Mikey, who is a "nice child." Lawrence pushes Splinta Claws off a balcony, smashing its face plate; only for it to reactivate. He realises that Splinta Claws attacks "nice" children instead of "naughty" ones. The boys trap Splinta Claws inside a play house, but it takes off its gloves, revealing its hands to be pieces of jagged metal and cuts down the door. Mikey, who has permanent injuries from an accident earlier that year, can't run away and Lawrence shouts at him to do something bad. He pushes over a Christmas tree, causing damage and Splinta Claws declares him a "naughty child."
The boys are left alone and argue: Mikey complaining that Lawrence is reckless and selfish, Lawrence upset that Mikey forgot his mother gave him a key card for the store. They knock over a box full of wishes that children wrote to Santa, and Lawrence sees that Mikey's wish was to stop being a problem for his mother because of his disability. Lawrence tries to reassure Mikey that no one thinks of him that way - he is "perfect." This reactivates Splinta Claws who comes after the boys again. Mikey leads Lawrence out of a rear entrance but warns that, once they leave, there's no way back into the store. Lawrence holds back, wanting to retrieve the present for his grandmother. He gets trapped inside with Splinta Claws while Mikey leaves. Mikey calls to ask where Lawrence is, and Lawrence lies that he has left the store and will catch up with Mikey soon. Splinta Claws now identifies Lawrence as a "nice" child for trying to spare Mikey's feelings, and attacks him.
Lawrence tries to escape another way but gets trapped in a window display. Just as Splinta Claws has cornered him, it suddenly stops. Lawrence thinks Splinta Claws ran out of power but Mikey arrives suddenly. He knew Lawrence was lying, so he never left the store. Mikey proposes that he and Lawrence can be naughty children by just taking the present and leaving, rather than trying to save the other children on Splinta Claws's list. He gives Splinta Claws the key card for the store. Lawrence hesitates, and Splinta Claws presses him for an answer. Later, Splinta Claws is seen breaking into the home of a girl he has identified as a "nice child."
The narrator questions whether there are really good and bad people, or just good and bad actions.
This episode contains examples of:
- Bad Santa: Splinta Claws is one, and kills children it deems to be "nice."
- Childhood Friends: It is mentioned that Lawrence and Mikey have been friends all their lives.
- Downer Ending: Splinta Claws seemingly kills all the "nice" children on his list (implied to be those who left wishes for Santa in the store.)
- Exact Words: Lawrence and Mikey try to escape from Splinta Claws by taking the lift to another floor. Lawrence says that Splinta Claws can't climb the stairs - and then it arrives in the same lift they took.
- Grey-and-Gray Morality: The episode runs on this, highlighted by the closing narration.
- Maybe Magic, Maybe Mundane: It is never made clear whether Splinta Claws became evil because Lawrence tampered with its wiring (which is what Lawrence believes) or because of some supernatural force.
- Naughty Is Good: Lawrence holds this attitude and considers it more fun to be cheeky and misbehave, thinking Mikey boring in comparison (although they're best friends.)
- Nightmare Face: Splinta Claws turns out to have one under its damaged face plate.
- Nightmare Fuel: Mikey describes Splinta Claws as this.
