Santa's sack has been stolen by the Abominable Brothers, so action elves Snappy, Flappy, and Mister Jingles set out to get the sack back. They use their tiny hammers to do almost anything.
Uniqua, Pablo, and Tasha are sitting on the picnic table making toys. They tell the viewer that they use tiny hammers to build anything as they sing Action Elves. Then they tell the viewer that they are no ordinary elves - they are the Action Elves, who save Christmas. Then they report to the North Pole and enter Santa's workshop.
Santa speaks to them by phone and tells them terrible news: his magic sack has been stolen by The Abominable Brothers Austin and Tyrone. They go to the storage room and get on to the Rocket Reindeer. They attempt to fly to the Brothers' igloo.
The elves can not see where the Abominable Brothers' igloo is, but they do see two snowmen carrying a red sack. They notice that the two snowmen are Tyrone and Austin, the Abominable Brothers. They try to land close to them, but accidentally land about a mile behind them.
Meanwhile, the brothers are hauling the sack to the igloo. They do not know that the sack is magic yet. Tyrone is pulling it while Austin is pushing. They have a conversation about how a tiny sack is so heavy. Then they wish it was lighter, and the sack turns smaller. Then they wish for more things as the brothers sing Magic Sack. The sack grows legs and starts to walk. Then they head to the igloo.
The elves land, but the Rocket Reindeer snaps in half. They start to walk and realize it is a lot more difficult to walk to the igloo rather than fly. Then they spot the snowmen and start running. But the brothers have already opened the igloo door and wished the sack was a couch.
The elves have a plan to lure the brothers outside. Snappy makes a wind-up robot toy with her tiny hammer and drops it purposefully on the igloo floor. The robot walks outside and the brothers follow. Then Flappy and Mr. Jingles wish the sack was a sack again, not a couch. Then they start running toward the workshop.
The brothers see the elves stealing the sack and chase them. They start a snowball fight while singing Snowball Fight. During the fight, they all fall into a large pit. Then Snappy's cell phone rings. The brothers take it before the elves can answer it. The snowmen talk to Santa and think that the "thieves" are the Action Elves (when the "thieves" are truly them). The Abominable Brothers are actually big fans of Santa, and are surprised when he tells them that they have his magic sack. The brothers were clearly unaware that sack belonged to him. Getting down to business, Santa instructs the Abominable Brothers and the Action Elves to work together to fill up his sack with toys and present it to his sleigh so he can make his delivery trip.
The five return to the workshop and fill the sack with toys as they sing To Fill The Sack For Santa. The elves are grateful and give the brothers two action figures outside. They all see Santa flying with his sack in his sleigh. Pablo's stomach rumbles and Uniqua asks if there are more thieves. Pablo tells her that it was just his stomach and invites everyone to his house for egg nog.
The workshop transforms back into the backyard as the children sing the end song. They enter Pablo's blue-colored house and shut the door. The entire cast opens the previously closed door and shouts "Merry Christmas!". The end credits for the episode start.