The episode begins on a clear starlit night, at the Happy Tree Friends' school in the middle of the forest. Generic Tree Friends fill the auditorium, where onstage Candy lies in a bed in front of a set resembling a bedroom. Offstage, Goofy, the director, motions for Hippy to walk onstage. Holding a candle, Hippy moves to the center of the stage when a spotlight shines several feet to the left of him. Goofy gets Eary's attention, and Eary, himself, who is operating the spotlight, moves the light onto Hippy. Goofy then motions up to Pierce and Hoppy, who stand above the stage. The two begin shaking an upside down, and obviously upset, Flowy, her dandruff acting as snow in the background. With everything in place, Goofy motions for Hippy to start singing.
Hippy begins singing "O Tannenbaum", while Lily, Josh, and Mime come onstage dressed in cardboard cutouts of a present, a candy cane, and a Christmas tree, respectively. From Candy's point of view, however, he can only see the top part of Josh's candy cane costume. The spotlight makes the costume look like a divine treat. Hippy stops singing upon hearing a crunching noise and a scream. Everyone looks over to see Josh with a big bite mark on his costume and torso. Everyone looks over to see Candy lying in bed with blood on his face, giggling happily, unaware that he just consumed cardboard and flesh rather than a candy cane. A scared Hippy looks over to Goofy, who tells him to keep singing.
As Hippy begins singing again, Josh runs offstage and gets the curved part of his costume caught on a rope. This causes a sandbag to drop and knock Lily's costume off her body. Unfortunately, this also cuts her face off, which lands at Hippy's feet. Horrified, he looks back to Goofy for guidance. Once more Goofy motions Hippy to keep singing.
By now, Hippy can barely sing as he sobs in fear. Lily runs around the stage in a panic, until she slips on her own face. Lily's face flies up and hits Eary in his face, causing him to swing the spotlight over to Pierce and Hoppy. They throw up their hands to shield their eyes and yells "Ouh!", dropping Flowy in the process. She falls down through the chimney in the set and, as her quills poke through the set, emerges out of the fireplace, missing her skin. Hippy and Mime become extremely terrified and look over to Goofy yet again. Goofy, scared himself, is climbing out the window. Mime and Hippy run away offstage, but not before Hippy tosses his candle in the air.
The candle lands right by the curtains, setting them ablaze. Stacy screams in fear while everyone starts panicking and running from their seats. Mime is the first to reach the door, but in all the confusion he forgets to remove his costume. He gets stuck in the doorway, while numerous Generic Tree Friends run against him, trying to get out. Eventually, Mime is forced out of the face-hole of his costume, squeezing his head into a red, cylinder-shaped glob of blood resembling a Slinky as it bounces down the stairs. Finally his costume breaks and the audience comes flooding out of the school.
Tycoon stands next to Goofy, the entire right side of his face (and tie) burnt. Goofy starts clearing his throat and sighs (after one of the Generics run away with fire all around him/her) before looking around at the damage. Eary's hearing aid has impaled him through his eye, Scoopy is burnt and bruised, Hatchy is screaming in pain as a Christmas star is lodged in his head and his left fingers (minus his thumb) have been cut off, and slowly, Mime weakly raises his hand. Blood and organs are everywhere.
Candy appears to have been lightly burned, crying as well, and has some blood on his fur (though it's not clear if its his or it belongs to someone else). Flowy kneels on all fours, freezing without any skin. In the background, Russell tries to comfort a burnt Generic Tree Friend while a flipped out Samantha stabs another Generic Tree Friend. Lily laments the loss of her face, Josh looks nervously at the gaping hole in his torso, and Kiwi stares horrified as she is now missing both of her feet in addition to her hands.
Bjorn stands off in the distance (strangely seeming undamaged), and Hoppy drags a wailing Pierce (who is missing the bottom half of his body) away. Everywhere dead and dying Generic Tree Friends litter the ground. Behind Hippy, Bonny lands in the middle of it all, apparently having been alerted by the Tree Friend's screams, yelling, shrieks and crying.
Hippy starts facing down at the snow upsetly thinking about what he had triggered after he threw the candle away accidentally moments ago, but as a shooting star flies by in the background he straightens up, determined. Once more he begins singing, and everyone looks up. The cries, shrieking and whimpers stop and everyone smiles, moved by Hippy's singing (except for Samantha who continues stabbing her victim). Goofy is even moved to tears by the sound of Hippy's voice. Suddenly, everyone starts joining hands, hooks, and bones around the burning school, joining Hippy in his song. Lily joins hands with Ahoy, as well as Tycoon with Flowy, and Stacy with Russell. As the camera pans up to the clear night sky, where a bright star shines brilliantly, a loud explosion is heard, and bodies are sent flying into the air.