The Pattersons, dad John, son Mike, and older daughter Elizabeth, are on a drive back to their house and brought a Christmas tree with them on the car roof. But the tree turns out to be bigger than John estimated. However, he manages to make it fit in the house better. John sets the tree in the living room when mom Elly and younger daughter April arrive home as well. Elly is speechless and in disbelief at the sight of it. Elizabeth begins decorating the tree on her own, as the other family members are too busy with other things to join her in that. John is searching for something, Elly has some food to prepare and gifts to wrap among other things, and Mike has to shovel the neighbors' driveways in exchange for money. One of the ornaments Elizabeth brings out is an angel, which is something Elly has had for years and she doesn't want it to be damaged. Elly asks Elizabeth to look after April for a while. When Mike goes back outside, he comes across his friends, Gordon and Lawrence. They're taking advantage of the snow day and ask Mike if he wants to join them, but he turns them down, as he has to keep clearing out the snow from the driveways to earn money, wanting to buy CDs and clothes, in addition to gifts for his family. Gordon and Lawrence carry on their way.
Elizabeth continues decorating the tree alone and finishes once the angel ornament is placed on top. When she's not looking, April uses a candy cane to pull on a wire and the pet sheepdog, Farley, tries to stop this. Before Elizabeth can prevent this herself, the tree is toppled over and the angel ornament breaks. Elly enters to find Elizabeth not minding April and the angel ornament broken. She's saddened by this and admonishes Elizabeth for not paying closer attention to April. Elizabeth tries to tell her that April is to blame, but her mom contends that April is just a baby. Elizabeth frets over being the middle child, but then she gets an idea: she'll just replace the angel ornament by making a new one. Meanwhile, while Mike is at the mall, he looks in a jewelry store department window and a necklace catches his eyes. He thinks about getting that as a gift for his mom, but when he sees the price, he begins to have second thoughts. Gordon and Lawrence happen to meet him there and Mike tells them about his dilemma. It's suggested that he should just buy some cheaper things. They ask Mike if he wants to accompany them to the restaurant, Big Pete's Pit, but he passes on the offer and they head there without him. The jewelry store's manager comes by and asks Mike a few questions about what he's looking at in the display window, like whether he's planning to buy it for a family member, then tells him decisions aren't hard. Mike says to himself that "decisions aren't hard, but money is".
Back at the Patterson house, Elizabeth is in her upstairs room working on the replacement angel ornament, which she makes out of construction paper. April is there with her and due to Elizabeth being distracted again, this time, April pulls out a dresser drawer and makes a mess with the items that are in it. Elly comes to the room to find Elizabeth not keeping a watchful eye on April once again and reproaches her. Elizabeth mopes about how hard it is for her being the middle child. When Elizabeth exits the house, she sees various neighborhood kids not taking the snow day for granted and her friend, Dawn, tells her they're heading to Dead Man's Hill for sledding. Elizabeth comes along with them. She joins a group of kids, including Dawn, and gets in the back of the sled. But a boy at the front of it tells her to get off, because she's too big. They take off without Elizabeth, she falls off it, and is left behind. Elizabeth then finds another, steeper hill to sled and tries to get the others' attention, but they pay her no mind. She sleds off on her own, however, when she passes a tree and it moves from the sled's motion, she doesn't notice a sign that's revealed, indicating not to sled down the hill. Elizabeth isn't able to control the sled and she rides so fast down the very steep and dangerous hill that she flies off of it and hits her head on a tree, knocking off her snow cap and glasses. She is left unconscious. She is out cold for hours and when she finally comes to, it's nightfall and she retrieves her glasses. She's lost and wanders until she comes across a log house. A kindly old woman is feeding some birds when she meets Elizabeth. The old woman invites her to the log house for warmth from the chilly, wintry weather and Elizabeth tells her she's not to go with strangers. The old woman says she's right about that, but also states that friends were once strangers too. She introduces herself as Grace and Elizabeth also introduces herself. Grace gives Elizabeth a cup of hot chocolate and is thanked for it. Elizabeth tells her about her difficult and frustrating situation of being the middle child in her family. Grace then sings a song about being the middle child while dancing with Elizabeth. Elizabeth feels better, wishes Grace could sing that song to her parents, and realizes her folks must be wondering where she is.
Mike returns home and John asks if he's seen her, and whether she's returned as well yet. Mike says no and his dad mentions that it's unusual for her to be out this late. They become increasingly concerned and head out to Dead Man's Hill to search for her. They both regret treating her practically as if she were invisible and not giving enough of their time to her. They find her snow cap and believe something terrible has happened to her. Mike asks his dad what he's going to do and he tells him he's going to call the ambulance or get help some other way. Mike also asks if he should stay behind, but John tells him he doesn't want to lose him as well and they keep on looking for her together. They're under a bridge, but don't notice Elizabeth and Grace walking across it. Elizabeth and Grace take the bridge that leads them back to where Elizabeth lives. Once they arrive there, Elizabeth tells Grace she wants to introduce her to the family, but when she turns around, Grace has vanished. Elizabeth laments over not getting to thank her for everything nor telling her goodbye. Farley greets her at the door and is the first one to see her back. When John and Mike return to their house, Elly and April, who went searching for Elizabeth at a park and the former tells them she's not there, are back there too. By now, the family are dreading the worst about their daughter and sister. Elly begins to make a phone call about their missing family member when Elizabeth enters the kitchen. When they see she's still alive and well, they're shocked, but nonetheless overjoyed and grateful to have her back, and have a newfound appreciation of her. Elizabeth tells them about her adventure, mentioning the log house she visited on the other side of the river and meeting Grace. But Mike tells her there isn't a log house, as he's never seen it and he knows the neighborhood well.
On Christmas morning, the family are unwrapping their gifts, which include new shirts for John and Mike, and a new necklace for Elly. Elizabeth hands her mom the new angel ornament she made herself as compensation for breaking the last one. Elly loves it and tells her she's her angel. The replacement angel ornament is placed on top of the Christmas tree and the family gathers to admire it. Then suddenly, Grace's face appears within the front of the angel ornament's head, as it's revealed that she's actually a real angel. Content, she gives a knowing smile at the viewers.