It's late on Christmas Eve and Gracie has just finished reading their duck Hermon a bedtime story. He falls asleep and feeling sleepy herself Gracie flys away on a magic carpet to dreamland where she meets Santa Claus, and learns that christmas may not go ahead. In her dream Gracie and Hermon the duck have to help Santa find the children's toys which have been cast away by a wicked witch. Along the way she meets the valiant prince played by who else but George, and he helps her in her quest to save Christmas.  A great entertaining episode with lots of variety, fun, music, hilarity and Christmas cheer.