When Santa Claus decides to retire, he appoints a washed-up kiddie show host (Douglas Seale) to take his place. Along the way, the real Santa ends up in the slammer on Christmas Eve, and it's up to goonish, glad-handing Ernest P. Worrall (Jim Varney) to bust him out. Varney plays a handful of supporting characters, including a slick-talking attorney. This film was followed by Ernest Goes to Jail.