Barney and the children are decorating the caboose for Christmas. Barney explains the concept of "Snowflake Buddies", in which one chooses a paper snowflake, and gives the person who's name is written on the snowflake a gift. Baby Bop then arrives with a long Christmas wish-list, so Barney and the children explain to her that Christmas is also about giving. Later, the group decides to write Christmas cards to their friends, as well as Santa Claus. After this, they play out the story of "The Nutcracker".
