For Christmas, Carl gives Homer a DVD player and the first season of Magnum, P.I. with commentary by John Hillerman. However, Homer forgets he is Lenny's secret Santa and gives him a pack of Certs out of desperation. Instead of giving bonuses, Mr. Burns gives everyone a cafeteria voucher and Homer a Joe DiMaggio rookie baseball card for Bart. To get money for Christmas shopping, Homer gives the card to Comic Book Guy, who gives Homer everything in his cash register. With their small fortune, the Simpsons go shopping at the Springfield Heights Promenade. Homer promises to buy a massive Christmas tree that will cause mudslides and flooding when it is removed, but he instead spends the tree money on a Personalized Talking Astrolabe for himself.
Homer gets shunned by his family when they find out, and becomes even more depressed when he finds out that the Astrolabe cannot be exchanged. While staying up late at night, Homer watches Mr. McGrew's Christmas Carol. There, he realizes just how selfish he is. Homer decides to reform his ways and become the nicest guy in town. Homer's acts include giving hobos his old clothes, giving Lenny a photo cube, giving Marge the last pork chop (causing her to break down in tears of joy) and building a skating rink in the Simpsons' backyard (to the delight of Comic Book Guy). After Gil Gunderson's comment of "Homer, you're the nicest man in town!", and Nelson Muntz's comment of "Haha! Your position has been usurped!", the actions cause jealousy to stir in Ned Flanders.
Flanders finds himself barely able to control his anger. He decides to buy everyone in town a Christmas present (and gets the money by renting out his house to a fraternity). Homer begins to think of beating Flanders by buying everyone a car. However, Lisa tells him not to and that, as a Buddhist, she believes people would be happier without presents. Homer gets the idea to do the ultimate good deed: steal Christmas. In the morning, an angry mob confronts Homer. The mob calms down when they see a star which they think is a sign from God; it is actually a flare from a trapped Hans Moleman. Homer gives everyone back their presents and the entire town sings Hark! The Herald Angels Sing. During the carol, however, Snake steals Homer's Astrolabe.