It is Christmas in London and Wendy, Michael and John are busy decorating the Christmas tree in their room when Peter flies in to let them know that Santa Claus will be stopping by Neverland to pick up some supplies. Michael is thrilled that he can meet Santa in person.
In Neverland, all the pirates are trying to convince Captain Hook to join in the spirit of Christmas, but he refuses to do so. Meanwhile preparations at the Never Tree are in full swing with the Lost Kids awaiting Santa’s arrival. While Santa takes everyone on a sleigh ride, Captain Hook is insistent on being the pirate who stole Christmas to include in his memoirs. He decides to kidnap Santa Claus to ruin Christmas. It is up to Peter and his friends to save Santa and ensure a happy Christmas in Neverland and the rest of the world.