The reason Santa's workshop has never been seen by polar explorers is because it's located under the North Pole. Once a year, Santa opens the passageway to the surface, but this year MAD is waiting and takes over the workshop to begin manufacture of a MAD Agent kit designed to hypnotize all the kids in the world and turn them into junior MAD agents. On Christmas Eve, someone sends a report to WOMP but Colonel Nozzaire thinks it's a joke; however, Gadget still believes in Santa and heads for the North Pole stopping enroute at the Last Resort, the only hotel that far into the Arctic. Penny has stowed away in the Gadgetmobile and learns from Santa's undercover reindeer George that the resort is under MAD control just like Santa's Workshop and the MAD agents running it intend to dispose of her uncle before he makes it to the North Pole. Can Gadget save Santa and Xmas before it's too late?