A bunch of angel puppies ask the whippet Annabelle to tell them a story. She begins to tell them about how Carface saved Christmas with a little guidance from Charlie and Itchy.
In a San Francisco alleyway, Charlie, Itchy and Sasha help their friends decorate for a Christmas party. Charlie and Itchy tend to the young puppies, primarily a little one named Timmy, who has a bad leg. The dogs have a collection for an operation for Timmy. To disrupt the festivities, Carface and Killer arrive for debts. However, as his is not yet due, Charlie refuses. Carface blows a mysterious dog whistle that hypnotizes everyone into give up their bones. As they depart, Carface and Killer take the food, presents and money, including that for Timmy's medical bills.
Charlie and Itchy's attempts to reclaim their goods fail but they discover Carface is working for Annabelle's evil cousin, Belladonna, who plots to use a massive dog whistle to hypnotize every dog in the city into stealing the masters' Christmas presents, causing them to be thrown out of their houses and abandoned by their owners, much in the same way Carface used to be when he was a puppy. Charlie plots to scare "the Dickens" out of him and asks Annabelle for some aid, resulting in them being transformed into characters from A Christmas Carol. Itchy becomes the Ghost of Christmas Past, Sasha the Ghost of Christmas Present, and Charlie the Ghost of Christmas Future.
They each visit Carface, and gradually learn how he turned into a hoodlum. At Itchy's insistence, Carface reveals that he was a happy puppy but his owner blamed him for making a mess of Christmas decorations, which gets him thrown out. Sasha tells him that without the money, Timmy will die, which will cause another — his own. Finally, Charlie shows that because of his actions, Carface will cause his own death, and be condemned to Hell for eternity.
Carface, having seen himself in Timmy, hurries to stop the whistle. Betrayed, Belladonna flies into a frenzied rage and is about to kill Carface and Killer when she is frozen solid by a massive amount of snow caused by Annabelle. As it begins to snow, everyone celebrates, but Itchy laments the lack of presents. At that moment, Carface arrives on a sled pulled by Killer and returns everything, and gives more. Handing back Timmy's money box, it is full to the top. Carface turns to leave but Sasha invites him to stay. He respectfully declines, deciding to visit his mother, but wishes everyone a Merry Christmas.
^Crump, William D. (2019). Happy Holidays—Animated! A Worldwide Encyclopedia of Christmas, Hanukkah, Kwanzaa and New Year's Cartoons on Television and Film. McFarland & Co. p. 7. ISBN9781476672939.
