It's Christmas time around the Pritchett and Dunphy houses. Everybody is going out of their minds. (The episode swings back and forth many times, so I have to break it down into the groups).
Jay couldn't believe the fiber optic tree Manny was proudly decorating in the living room. He thought certain traditions should not be messed with, like natural trees, eggnog, Perry Como, and Bing Crosby on the hi-fi. Jay took Manny out to the forest to cut down a real pine tree. After an hour of walking, they find their tree...right next to where they parked. Jay started cutting it down with an axe, but it wasn't budging. But he was determined. And he breaks the axe handle.
After also ruining a saw, Jay thought they could use the car to pull the tree down. And it was pulled down long enough for half of it to be stripped off by the rope and it went right back up. By the way, Jay's tradition of a cigar after cutting down the tree is best done a bit further away from the trees. Finally, since they got through most of the trunk, perhaps they could push it down themselves. Or the car could roll down the hill and run the tree over, that works, too. But Jay had his natural tree, complete with lights and ornaments.
The elliptical rider was a godsend to Phil last Christmas, who vowed to use it all the time, much to Claire's annoyance since he kept it in the bedroom. But there was a catch: Phil has until this Christmas to ride it the equivalent of California to Canada or it has to go to the garage. He was 10 miles short with a day to go. At first he could feel that fresh air and reasonably-priced pharmacy medicine. But he was starting to wane. Luke doesn't seem to care until Phil mentions the garage. Where Luke had left 6 weeks worth of recycling because he always forgot to get it out for pickup early in the morning. Suddenly, Luke is encouraging Phil to make it all the way. He wouldn't want the rider in the garage; it's too drafty.
Luke needs enough time to get Dylan to take all the recycling for him in exchange for some fireworks. Of course, Dylan really needs to learn how to properly handle fireworks, if the second-degree burns on his hands and the deafness are any indication.
Claire, not wanting to deal with Phil, is all too happy to head to Gloria's house to babysit. Gloria probably should have told her it wasn't for Joseph but for Gloria's mother, who was never really hands-off when it came to whatever Gloria did, particularly in telling Gloria she did so many things wrong. Claire wasn't happy at first, but several recipes for rolls and cookies later, and suddenly Gloria is jealous her mother seems to love Claire more. Even giving Claire some extra cookies for doing a headstand. (Seriously she did one.) They start arguing, and Pilar has to get in between them. Claire had to admit loving the attention, given that her own mother can't be bothered to drive three hours to see her and had given her a pair of slippers every year for Christmas since she was 9. But Mama Delgado made her realize mothers take it hardest when their kids leave them and the slippers are DeDe's way of remembering a happier time.
Haley was happy to be moving to the basement to have her own room away from Alex, Claire's stories about the two of them huddled in a bed together as kids to look over their gifts not swaying her. But they had work to do at the mall. Haley was an elf, and Alex was dressed as Mrs. Claus for all the kids. But this being a sitcom, Santa wasn't the most enthusiastic person around. Alex berated him for not being more into the role and he decided to sneak out and leave. That didn't sit well with the throngs of kids and angry parents, nor did the hot chocolate Santa brought, which must have had some booze in it based on how drunk Alex looked when she had a few cups. Haley tried to keep the peace outside. But Haley came in to convince her it wasn't her fault Santa left. Alex wasn't hearing it, and the throngs were starting to surround the house. Haley tells Alex she'll find someone, that she wasn't a bad person to live with. Well, at least until the bratty kids all went The Walking Dead on them.
Mitchell was quite proud of getting all his shopping done way ahead of schedule. Not having a job had nothing to do with it, despite what Lily kept saying. Cameron had the information for Pepper's Christmas party...aka The 12 Gays of Christmas. Cam was taking Lily to help out at a charity event, and Lily was happy to do it since she knew helping others would get her a Puppy Pound for Christmas. Although according to her list, she wanted a Guppy Pond. Apparently she reversed the lowercase "g" and forgot a "u." But not a big deal. Mitchell could still go shopping for one...if only he could find it.
Cameron and Lily were ready to donate at the charity event...except for the fact they were mistaken for people who needed the charity. Cameron realized the mistake and tried to escape, only Lily got her Puppy Pound and the lady actually running the event wanted their picture for the newsletter. What to do? Thankfully, Mitchell came to pick them up with a car full of gifts. Cameron was all too happy to pass the gifts out to the folks who really needed them. Only one tiny problem. Mitchell found out Cam and he were supposed to bring gifts to Pepper's party, and that's what was in the car. Things like his & his shower clothes, a Himyalan salt plate, a body fat scale, and an art book...by Robert Mapplethorpe. Yeah, THAT Robert Mapplethorpe. And Lily still needed a Puppy Pound because she gave hers to the young man who had to give back the Robert Mapplethorpe book. There was one left but it was too far away for Mitch and Cam to get. But not Phil. Who drags himself over to the mall, completely ignoring his two daughters in danger, and starts walking up a broken escalator only to have it start up again. Yes, in the wrong direction. Thankfully, the next day was Christmas.
Finally, Phil and Claire discover all the recycling in the basement because Dylan screw the plan up which makes Luke to owe them six weeks' allowance.