Hank is ambushed at his front door and dragged unconscious into the sewers. Nick receives a call from Gregorek's partner demanding that Nick meet him at the outfall with his brother or find Hank in pieces. Nick follows the directions, leaving his gun in the car. When Nick sees his partner, Hank yells out there's three of them! With his handy-dandy vambrace, Nick pulls some serious Grimm moves and kills Gregorek's brothers, thus ridding Portland's sewers of the dangerous Wesen.
After a night of stealing Christmas gifts from cars, two young ruffians survey the plunder of their crimes. They're interrupted when a hulking beast in a Santa outfit emerges from the shadows. The visitor removes his hood to reveal large horns, a hideous face and a flaming forked tongue. It's the Krampus! Before the teenagers can escape, Krampus attacks them, easily catching one naughty kid and putting him in a large sack. The other thief manages to evade Krampus by hiding under a car. As Krampus departs with his hostage over his shoulder, he leaves his trademark calling card: a single lump of coal.
Meanwhile, in Vienna, Renard meets with an assassin and his cadre of rebels to discuss plans to take out his own family, The Royals, once and for all. Renard is the perfect weapon for the team of rebels: his half-Royal blood gives him access to key members of the family, and (most importantly) he has a Grimm at his disposal.
Back in Portland, Monroe and Juliette meet in secret at Monroe's house. Monroe informs Juliette that he has 42 boxes of Christmas decorations, and he wants to decorate the entire house while Rosalee is at work in order to surprise her with a winter wonderland when she returns home. It's a daunting task, but Juliette is happy to help.
Nick, Hank and Wu arrive at the scene of last night's incident. It's easy to see what the teenagers were up to. They find the second boy in a nearby car, alive but terrified. Later at the hospital, Nick and Hank interview the young victim. The boy explains the events of the previous night: he and his friend were stealing presents when they were attacked by a horrific beast who kidnapped his friend. The boy can't explain who took his friend, but he freaks out when he sees a man dressed as Santa Claus. This is a shaping up to be a strange case, indeed.
Later that night, another young petty thief picks the pocket of a woman out Christmas shopping and retreats to a nearby parking garage. Krampus attacks again, whipping the thief with a switch before bagging him up and disappearing into the night. A bystander witnesses the event and describes a nightmarish creature dressed as Santa. It's the worst time of year to be hunting a bad guy in a furry red suit. The detectives draw some unwanted attention by beating up a Santa in a busy shopping area, but they're no closer to finding the two missing boys.
Rosalee returns home from work to find that Monroe has decorated the entire house for the holidays. While it's certainly beautiful, it's also a bit overwhelming. Rosalee reluctantly confesses to Monroe that she's never really been very festive around the holidays. Christmas was a big deal when she was growing up, and the holiday always reminds her of her aunt and uncle, who died in a car accident on Christmas Eve. Monroe feels terrible, and Rosalee feels worse for ruining the Christmas spirit.
Rosalee wakes up the next morning to discover that Monroe has taken down all the Christmas decorations. She feels terrible about it. Nick and Hank arrive at Monroe's to get his take on the Santa kidnappings, and Monroe tells the detectives about Krampus. According to the legend, the Krampus is like Santa's evil twin. He kidnaps naughty children and hangs them from the tallest tree in the woods until he's ready to eat them on the night of the Winter Solstice. Coincidentally, that's today. The detectives don't have much time. If they can find the tallest tree in the area, they'll know where to find Krampus.
The detectives head to Council Crest, where they're hoping to find the tallest tree in the area. The gamble pays off when Hank finds a set of boot prints, and Nick's Grimm hearing leads them straight to the missing kids. Unfortunately, Krampus is right behind them. Nick intercepts the beast and a brutal fistfight ensues while Hank, Monroe and Bud race to free the kids. Fortunately, even the Krampus is no match for Nick's enhanced Grimm strength, and he knocks Krampus out cold with a single punch.
Nick can't take a hideous beast into the station, but luckily time is on their side. At the stroke of midnight, the Krampus transforms back into his human form. The man has no idea what happened, how he got into the woods or even how he got to Portland. He doesn't even know what a Wesen is, which might explain why Krampus has never been caught. Even Krampus doesn't know he's Krampus!
Nick and Hank know that they'll never convict the 42-year-old photographer of Krampus' crimes, so they just have to let the man go and hope for the best next year. Monroe returns home to find that Rosalee has redecorated the house with Christmas decorations.