Plot
Two years following the first film, Kate Pierce is a cynical teen, unhappy about spending Christmas in Cancún, Mexico with her mother Claire, brother Teddy, Claire's new boyfriend Bob Booker, and his son Jack. Wanting to be back home where it is snowing, Kate secretly tries to fly back early to Boston.
Unbeknownst to Kate and their stowaway Jack, the shuttle is driven by Belsnickel, a nefarious Christmas elf, who sends them unexpectedly through a wormhole to the North Pole. Found and saved by Santa Claus, he brings them back to his and Mrs. Claus's. The Clauses show them around the village, then have dinner.
Jack and Kate go to bed as Belsnickel and his follower Speck attempt to destroy the village. Mrs. Claus tells the kids Santa's origin story. Born as Nicholas in Turkey before 312 AD, he lived his early life there and became the Bishop of Myra. As a bishop, he delivered gifts to the poor and needy, becoming a local hero. He was later canonised as Saint Nicholas of Myra. He went on to save the elves from extinction, so received the Star of Bethlehem, the magical and holy artifact that stops time and provides power to Santa's Village. The Clauses adopted Belsnickel, but as he grew up and they had less time for him, he became unruly, transforming him into a human as a curse, so he ran away.
Belsnickel releases the yule cat Jola into the reindeer pen, injuring Dasher. Then shoots a potion into the village that makes the elves crazy and steals the Christmas Star from the top of the Christmas tree.
Santa and the others confront Belsnickel. The two struggle over the star, and accidentally destroy it, causing the village to lose power. So Santa and Kate leave for Turkey to get Hakan's forest elves to replace it.
The maddened elves' snowball fight distracts them, so Jack can escape. He leaves to get a root to cure them, while Mrs. Claus stays behind, healing Dasher. Meanwhile, Kate and Santa successfully find the elves and Hakan, who give them a casing for a new star and Santa captures power from the Star of Bethlehem inside it.
While flying back to the village, Belsnickel catches up to them on a sleigh pulled by jackalotes (a hybrid of a jackal and a coyote which he created). He steals the star to keep from aging until he can figure out how to replace Santa, and plants a time-travel device on Santa's sleigh, which transports them back to 1990 Boston.
Jack finds the root, bringing it to Mrs Claus. Kate attempts to buy AAA batteries for Belsnickel's time travel device at Boston airport so she and Santa can return to the future. However, she is detained by airport security as the bill has the modern redesign so seems counterfeit.
Kate is taken to a locked lost kids security room. Lamenting about her wrongdoings in Cancun, a kid named Doug Pierce comforts her, then helps her escape. After Kate joins Santa, she realizes Doug is her late father. With help from an airport worker, Santa gets everybody singing a Christmas song so the weather clears. With Christmas spirit high enough for the sleigh to fly, he puts in the batteries, so they head back and recover the star.
Mrs. Claus grinds the root into a powder, which Jack loads into the snow cannons. He shoots it onto the elves, curing them. Santa and Kate race back to the village, evading Belsnickel as he chases them.
Mrs. Claus throws an explosive gingerbread cookie between the sleighs to prevent their collision in a game of chicken. Dasher recovers and assists Santa in defeating Jola, who is then hurled far away. Kate places the star on the tree, restoring power to the village. Santa gives Belsnickel the first toy that they built together, they reconcile and he is transformed back into an elf.
Santa flies Kate and Jack back to Cancún where they tell an excited Teddy about their adventure. Kate also becomes more accepting of Bob. At the end, the five in Mexico sing "O' Christmas Tree" as everyone in the North Pole also sing it.
