Hugo loves elves, but is teased by his peers. Hugo decides to go against his feelings and force himself to grow up. But when his family is on Christmas vacation, he discovers that elves live at the hotel. Hugo struggles internally not to help the elf girl Sne, who has lost her elf parents. Sne wants to go home, but she can't get the reindeer to fly because she has never learned magic.

In the new film, Pixy the elf makes a surprise appearance at the Jul family's house on December 1. He has come to retrieve the elf hat he forgot last year, which holds a secret—his magical elf ball. Hugo accidentally destroys the elf ball, causing Pixy to lose his elf magic and begin to age rapidly. Hugo is the only one who can reassemble the ball and save Pixy, so he must fly with his siblings Alfred and Vega to the magical elf land. On their journey, they encounter many obstacles – not least the evil elf Evol and his band of elves, who try to prevent Hugo from reassembling the ball. Evol turns Alfred into a reindeer and uses magic to make Vega hopelessly in love with him.