Fred motivates the elves to make as many gifts as possible in 10 hours. Because of his injury, Nick is unable to deliver gifts. Feeling guilty, Fred decides to deliver the presents (as only a Claus can deliver the gifts). He reminds Nick that most of the "naughty" kids aren't bad, but good kids going through bad situations, and that every child deserves a gift on Christmas. Fred gets the workshop to quickly make simple gifts so that every child gets a toy. Fred and Willie begin to deliver the gifts, but Northcutt sabotages their efforts and fires the elves. Nick realizes that Northcutt was also bullied as a child, which caused him to become troubled. Nick apologizes to Northcutt for putting him at the top of the Naughty List in 1968 and gives him the Superman cape he had asked for as a child.
