Through some slight of hand, Sue managed to put only her name into the hat for the teachers' secret Santa exchange, so that all the gifts were for her. When the teachers discovered they'd all bought items for Sue, she smiled smugly, greedily tallied up her goodies and said, "I hate Christmas, but I love presents."
Mr. Schuester, Emma and Coach Beiste eventually led the charge to take back Sue's ill-gotten goodies and give them to homeless kids. But Sue dressed up like the Grinch – green makeup and all – stole back all the presents and destroyed the glee club's Christmas tree and decorations.
In the midst of her rampage, Brittany – whom we learned still believes in Santa – stumbled across Sue and mistook her for the real St. Nick. Just like in The Grinch Who Stole Christmas, Sue lied to little Brittany, telling her that one of the lights was broken and that she was taking everything home to be fixed.
Seeing the devastation wrought by Sue, the glee clubbers almost lost their holiday spirit. But Finn convinced them not to lose hope. In the end, the glee club put on a show for the school's teachers, singing a sweet version of "Welcome Christmas."
When Sue heard it, even her cold heart melted, and she later made it up to Mr. Schuester by putting up a tree and decorating his house – and giving him hair clippers. "I thought you might want to put all of us out of our misery and shave off that Chia Pet," she suggested, before wishing him a heartfelt merry Christmas.
Meanwhile, Rachel tried to get Finn back but he refused, saying that he'd been "really messed up" by her infidelity. At one point, he brushed off her pleas for forgiveness and left her alone to sing "Merry Christmas, Darling" in the school auditorium. The two eventually sang a duet of Wham's "Last Christmas" while at a tree lot, but their relationship is officially kaput – at least for now.
As for Brittany and her belief in Santa, boyfriend Artie was initially shocked – but instead of dashing Brittany's beliefs, he convinced the glee club to help keep Brittany's faith in Santa alive.
The plan nearly came undone when Brittany asked Santa at the mall to make Artie able to walk. Knowing the request was impossible, Artie pleaded with Coach Beiste to dress up like Santa and gently tell Brittany that this year her wish just won't come true. When she heared the news from Santa (Beiste), a heartbroken Brittany told Artie: "I used to believe that Santa could do anything. If Santa isn't magical, I don't even know if I want to believe anymore."
But Coach Beiste managed to grant Brittany's wish after all (sort of) by anonymously leaving a special device called a "re-walk" for Artie. With it, he could stand and walk haltingly – which was enough to renew Brittany's faith in the magic of Christmas.