Lady Boreal was the queen of the Northern Lights, who took on a human form to stop Winterbolt's tyranny. She puts him in a deep sleep that would go on as long as she lived as a human. In a way, she also guided Santa Claus to the North Pole, where he can continue making toys for children. Sadly, she could not be human forever and returned to her original form as the Aurora Borealis. All of her spells wore off in the process, including Winterbolt's imprisonment.
When Boreal learned of Winterbolt's plan to have Santa get lost in fog on Christmas Eve, she was determined to stop it. But she was now too weak to stop Winterbolt once again, so to help Santa for his journey, she decided to leave something to "guide him". She visited the den of Santa's lead reindeer, Donner, and gave a gift to his newborn son, Rudolph, leaving him a special mark on his hoof, depicting a star in a snowflake. This would give Rudolph the ability to glow his nose. Lady Boreal always said nothing is forever, but the magic she used on Rudolph is stated to be stronger than that. Before returning to her normal form as the Aurora Borealis, she warned Rudolph though that if he used his nose for evil, the magic will fade away.
Later on in the movie, Lady Boreal is heard from again, only this time in the form of the Northern Lights. She tells Rudolph if he want his magic back, he must be brave in the face of danger, after which it will glow again.
In her human form, Lady Boreal is similar in some ways to Galadriel, the Elven Queen from J.R.R. Tolkien's classic fantasy "The Lord of the Rings", as Winterbolt is in some ways similar to Saruman, the evil Wizard from the same source.