The holidays are here on Sesame Street, and Elmo is determined to make it the best Christmas for Tango. At Elmo's family holiday party, friends and family sing about how wonderful this holiday will be. The Count arrives bearing gifts for everyone, including a wind-up rocket ship for Elmo and a cute, nutcracker-shaped doggy toy for Tango. After a fun-filled night, Elmo and Tango fall asleep listening to Elmo's dad, Louie, read them the story of The Nutcracker. Elmo drifts into a dream sequence where Tango can speak, and that's when the adventure begins.