The Story of Holly and Ivy
 The orphanage outside Mill Valley has closed for Christmas, and the children have been dispatched to various homes for the holiday. Only one child, Ivy, is overlooked. The head of the home cannot take Ivy home with her, so she decides to send her to an infants' orphanage some distance away. Ivy suggests that she could instead go to her "grandma's house"&nbsp;&ndash; but she has no grandmother. Ivy is put on a train, which passes through the town of Mill Valley. While it is stopped, Ivy looks out of the window and notices that, due to a malfunction, the illuminated welcome sign no longer reads MILL VALLEY but instead reads I V Y. She takes this to indicate that she really does have a grandma, and that she lives in that town. She leaves the train, and it departs without her. Meanwhile, a beautiful new Christmas doll named Holly is standing in the display window of Mr. Blossom's toy store, wishing for a little girl to come and take her home. The toy owl next to her, Abracadabra, treats her with undisguised contempt, and suggests that, since no one will want Holly after the holiday, she will wind up spending the year in the back room with him. Elsewhere in Mill Valley, Mrs. Jones suggests to her husband that they have a Christmas tree that year, but her husband refuses, saying that it would be a waste of money since they have no children to enjoy it. Despite his words, Mrs. Jones buys a Christmas tree and decorates it. After a very hectic afternoon, Mr. Blossom's toy store finally closes. Neither Holly nor Abracadabra has been sold. Mr. Blossom is tired from a long day's work, so he asks Peter to lock up the store for him, telling him that he can pick a toy for himself as a bonus. Peter locks up the store, but the key slips out of a hole in his pocket without him noticing, landing in the snow outside the shop. Meanwhile, Ivy's search for her grandma has not gone well. Feeling very discouraged, she is walking past the toy store when Holly catches her eye. The doll is exactly what she wanted, but she is outside, and the store is locked. She finds the key that Peter dropped, and decides to keep it. Night falls, and she takes shelter in a nearby alley. The next morning, she returns to the toy store to look at Holly, and overhears a conversation between Peter and Officer Jones, who has been on patrol all night. Peter is distraught about losing the key to the shop. Ivy realizes that was the key that she found, and returns it. Peter goes in to check the store. Officer Jones quickly realizes that Ivy is on her own, and decides to take her home for breakfast. Peter ensures that the store has not been robbed. Since little Ivy saved his job, he decides to use his bonus to select a present for her, and chooses Holly. Abracadabra, furious that Holly's wish is about to come true, hurls himself at Peter and winds up in the trash. When Mr. Blossom goes to retrieve him later, he has mysteriously vanished. At the Jones's house, Ivy realizes that they have a beautiful Christmas tree and no children, which means that she has found her grandma. Shortly after, Peter delivers a beautifully wrapped box, which contains Holly. Everyone's wishes have come true: Ivy has a family and a Christmas doll. Holly has a little girl love her. And when they adopt Ivy, the Joneses have the child they always wanted.