Meet Buddy (Will Ferrell). He is an elf, like on of those elves who work in the North Pole with Santa Claus. Except, he is not elf at all. He is a regular human. The story with him started a long time ago, as he was only a baby. As Santa was on one of his regular Christmas gift giving routes, a baby from the orphanage crawled into his bag full of presents. After he got back to the North Pole, only then he discovered a baby, that was crawling out of his bag. Confused, Santa gave him to the other elves to raise him as one of them. 30 years later, Buddy was all grown up and it was more than obvious that he is not one of them. He was a lot taller, bigger, simply different. So, as the Christmas comes closer, Santa allows Buddy to go out in the real world and look out for his real father. While Buddy gets to experience the whole new world in the New York city, it turns out that his father, Walter Hobbs (James Caan), didn't even know that Buddy was even born. The encounter of these two totally different worlds will spark lots of fires and flames, and will force both of them to re-evaluate their ways of living.