A man who claims to be Santa Claus (Douglas Seale) arrives at the Orlando International Airport on December 23. Ernest P. Worrell (Jim Varney) is working as a taxi driver. He takes a passenger to the airport, but speeds and the passenger falls out of the taxi. Ernest later picks up Santa Claus, who tells Ernest that he is on his way to inform a local celebrity named Joe Carruthers (Oliver Clark) that he has been chosen to be the new Santa Claus. Joe had previously hosted a children’s TV program named “Uncle Joey’s Treehouse” in the Orlando area similar to Mister Rogers’ Neighborhood with emphasis on manners and integrity with the catchphrase “They never get old. They always stay new. Those three little words, Please and Thank You.” It got cancelled three weeks before and Joe must settle for a new job reading stories to children.
While they are driving, a runaway teenage girl (Noelle Parker) calling herself Harmony Starr joins Ernest and Santa in the cab. When they get to their destination, Santa possesses no legal currency (only play money), so in his giving Christmas spirit, Ernest lets him ride for free. The decision ultimately gets Ernest fired. As a dejected Ernest leaves the taxi garage, his former boss throws out Santa’s sack, which it turns out Santa had left behind.
Santa arrives at the Orlando Children’s Museum to talk to Joe, but is interrupted and rebuffed by Joe’s agent Marty Brock. Marty misunderstands Santa’s name, thinking he said “Mr. Santos,” and continues to call him by that name, even when he tells him his real name. He begins to worry as he then discovers that he had left his sack in the cab, and becomes more discouraged as he realizes he is becoming forgetful in his old age (he’s 151 years old, as his passport shows he was born in 1837). Joe does not believe Santa’s story and Marty has him arrested. Meanwhile, Ernest goes over to his friend Vern’s house to put up a Christmas tree, much to Vern’s distress (as with the original commercials that first introduced Ernest, the audience never sees Vern’s face and only his point of view). Ernest discovers the magic power of the sack, and realizes that the owner really is Santa Claus. He and Harmony immediately set off to find Santa and return it.
On Christmas Eve, having learned of Santa’s imprisonment, Ernest poses as Astor Clementh, an employee of the governor and Harmony as the governor’s niece Mindy, and they help Santa escape from jail by convincing the police chief that Santa believing that he is Santa Claus is “infectious insanity” and he must be taken to solitary confinement. Ernest disguises himself as an Apopka snake rancher who sneaks Santa into a movie studio and speaks to a security guard about delivering the snakes to people who direct horror films. Meanwhile, Marty presses Joe to move on from his children’s show career, shave his beard, and instead land a part in a movie as a father and family man, since he is good at working with kids; however, it turns out to be a horror film titled Christmas Slay about an alien which terrorizes a bunch of children on Christmas Eve; this offends Santa so deeply that he punches the director in the eye. Joe accepts the part but feels uncomfortable swearing in front of the kids on set.
Harmony is fascinated by the power of the sack, and hopes to find gifts of monetary value inside. She steals it, replacing it with one filled with feathers, and attempts to run away yet again to Miami. Santa tracks down Joe at his home, but has nothing to show except the fake sack. Joe politely but firmly declines the job.
Ernest heads to the airport to pick up the sleigh, reindeer, and two of Santa’s elves before they hit rush hour traffic. But their truck is disabled and Ernest decides to drive the sleigh to the Children’s Museum. His inexperience, though, leads him and the elves on a wild, out-of-control ride through Orlando. Meanwhile, Joe is overcome by conscience when the director refuses to tone down any of the profanity and violence in the film. He sees the haphazardly-flying sleigh from a distance, and realizing that Santa was telling the truth all along, is overcome with joy and runs off to find him.
Joe finds Santa at the Children’s Museum and accepts the job. Harmony returns with the real sack, apologizing to Santa (who reveals that her real name is Pamela Trenton.) The sleigh arrives just in time and Joe asks Ernest (saddened that the adventure is over) to drive for the first night, while Pamela (who decided to go home) hitches a ride as an honorary elf.
The film ends with the words, “Merry Christmas to all, and to all a good night!,” followed by a sleigh dash that spells, KnoWhutImean?, one of Ernest’s catchphrases. Meanwhile, Chuck and Bobby were looking at the letter “E” for what it means. Suddenly, you see the Easter Bunny’s ears when they come out of the cargo box, and Chuck rolls his eyes and squeals like he is screaming for help.
You can buy the film HERE.